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COMPLETE    COURSE 


LIBRARY 

OF   THK 

University  of  California. 


GIFT    OF 


Class 


UNIVERSITY    OF    CALIFORNIA 


DEPARTMENT  OF  EDUCATION 


GIFT  OF  THE   PUBLISHER 


No. 


S'i^  ^  '  /?^mw^     /    ^/  0   S  , 


IVILLMMS  &  ROGERS  SERIES 

Modern  Illustrative  Bookkeeping 


DESIGNED    AS   A   TEXT-BOOK   FOR 


ALL  SCHOOLS  GIVL\G  A  COURSE  IN  BUSLNESS  TRAINING 


COMPLETE  COURSE 


RV 

E.  TIRGJLt^^EAL 

Author  of  Modern  Eankixq  and  Bank  Accounting 

AND 

C.  T.  CRAGIX 

SCRIPT   IWA'STRATIOXS   V.Y 

E.  C.  MILLS 


N"EW  YOEK  . :  •  CIXCIXXATI  - :  •  CHICAGO 

AMERICAN   BOOK   COMPANY 


rt^  % 


Copyright,  1900.  by 
Williams  &  Rogers 

Copyright,  1901,  by 
American  Book  Company 

MOD.    IlV.   BKPG.    complete 

M.  3 


llfltC  c  <■ 


INTRODUCTORY? 


T 


This  book  is  designed  to  teach  bookkeeping  as  it  is  practiced  by  the  best  business 
houses.  We  have  no  apology  to  offer  for  the  innovations  in  methods,  or  the  deviation 
from  the  school  forms  of  balance  sheets,  statements,  loss  and  gain  accounts,  etc.  We 
believe  the  time  has  arrived  when  all  progressive  teachers  will  w^elcome  practical  l)usiness 
methods,  even  though  they  supplant  long  cherished  school  forms  and  practices. 

In  the  compilation  of  this  work  we  beg  to  acknowledge  the  courtesies  and  assistance 
extended  us  by  Lord  &  Taylor,  New  York;  John  Wanamaker,  New  York  and  Phila- 
delphia; Park  &  Tilford,  New  York;  Baldwin  lyocomotive  Works,  Philadelphia;  Gimbel 
Brothers,  Philadelphia;  Comptroller  of  Currency,  Washington,  D.  C;  Assistant  Secretary 
of  the  United  States  Treasury,  New  York,  and  of  over  a  hundred  other  leading  business 
houses  and  banks  which  have  cheerfully  permitted  us  to  examine  their  books  and  whose 
head  bookkeepers  have  furnished  much  valuable  information. 


TO  THE  STUDENT. 


Accuracy  is  the  first  essential  of  business;  without  it  you  cannot  hope  to  hold  a  paying 
position  in  the  commercial  world.  Accuracy  can  be  acquired  only  b}^  painstaking, 
thoughtful  w'ork  on  your  part  from  the  start.  Read  carefully  all  instructions,  and  do  just 
as  you  are  told  to  do. 

Do  not  make  mistakes  in  simple  mathematical  operations.  Errors  in  addition,  sub- 
traction and  multiplication  are  inexcusable,  and  will  not  be  tolerated  in  business.  Verify 
all  additions  and  multiplications.     Know  you  are  right  before  you  go  ahead. 

Neatness  and  Leg'ibility.  A  neat,  legible  style  of  handwTriting  which  can  be  executed 
at  a  fair  rate  of  speed,  and  absolute  legibility  in  figures,  are  necessities  in  the  modern 
office. 

The  acquirement  of  these  attainments  will  necessitate  constant  practice  on  the  part  of 
most  students.  The  script  illustrations  in  the  book  are  excellent  models  to  follow.  Do 
not  allow  yourself  to  do  careless  and  slovenly  work  either  in  writing  or  in  making  figures. 

Details.  Inability  to  estimate  the  importance  of  a  thorough  mastery  of  details  is  the 
cause  of  more  failures  in  life  than  all  other  causes  combined.  Learn  to  pay  attention  to 
the  little  things.  Follow  3^our  instructions  implicitly;  do  not  be  content  with  doing  a 
thing  nearly  right,  but  do  it  exactly  right.  Remember,  "  Perfection  is  made  up  of  trifles, 
but  perfection  itself  is  no  trifle. ' '  The  successful  business  man  must  master  multitudinous 
detail. 


221751 


CONTENTS. 


Work  for  the  Student,  January, 5 

Model  journal-daybook, 6 

Model  ledger, 8 

How  to  journalize, 10 

Directions  for  posting, 13 

Directions  for  taking  a  trial  balance,    ....  18 

Review  questions,  January, 20 

"Work  for  the  student,  i<*ebruary, 22 

Directions  for  checking  from  journal  to  ledger,  26 

Work  for  the  student,  March, 27 

Bills  Receivable  ( form ) , 28 

Bills  Payable             "          30 

Indorsements, 32 

Trial  balance  of  differences, 33 

Directions  for  detecting  errors  in  a  trial  balance,  34 

Directions  for  making  a  statement, 34 

Directions  for  making  a  proof  of  statement,    .  38 

Review  questions,  March, 39 

Directions  for  closing  the  ledger, 42 

Directions  for  making  a  proof  trial  balance,    .  46 

Test  ledgers  Nos.  one  and  two, 48 

Work  for  the  student,  April, 49 

Flour,  Grain  and  Produce  business, 50 

Method  of  opening  a  bank  account, 54 

Statements  of  customers'  accounts, 64 

Review  questions,  April, 66 

Model  cash  book, 68 

Model  sales  book, 70 

Work  for  the  student.  May;  Tea,  Coffee  and 

Spice  business, 71 

How  to  calculate  interest  and  discount,  ...  76 

Shipping  receipts, 85 

Telegram, • 86 

C.  O.  D.  sales, 88 

Form  of  loss  and  gain  statement  and  balance 

sheet,  May, 92 

Directions  for  making  statement,  May,  ...  94 

Exercises  in  bank  discount  and  interest,  ...  98 

Price  lists,  May  and  June, 100 

Review  questions.  Ma}', 102 

Drafts, 103 

Exercises  in  journalizing  drafts, 109 

Model  bill  book, 112 

Model  invoice  book, 113 

Articles  of  copartnership,  June, 114 

Work  for  the  student,  June;   Wholesale  Gro- 
cery, Tea,  Coffee  and  Spice  business,  ...  114 

Cash  check, 121 

Model  statements,  June, 126,  128 

Examination,  June, 130 

Review  questions,  June, 133 

Commission,  Shipping  and  General  Merchan- 
dising business, 134 


Model  loose  leaf  consignment  ledger 135 

Model  commission  cash  book, 136 

Model  shipment  ledger, 138 

Model  commission  sales  book, 139 

Model  account  sales  register, 140 

Model  letter  impression  book, 142 

Model  journal,  Juh-, 143 

Work  for  the  student,  July, 144 

Check  for  New  York  draft, 151 

Directions  for  posting,  July, 154 

Overdrafts, 158 

Model  statements,  July, 160,  162 

Interest  on  partners' investments, 164 

Review  questions,  July, 165 

Wholesale  Dry  Goods  business, 166 

Model  special  column  journal, 167 

Model  cash  book, 168 

Work  for  the  student,  August, 170 

Memorandum  of  credit, 178 

The  balance  ledger, 179 

Directions  for  posting,  August, 180 

Directions  for  finding  partners'  interest,  .    .    .  183 

Model  statement,  August, 184 

Directions  for  closing  Loss  &  Gain  account, 

August, 1S6 

Work  for  the  student,  September, 187 

Model  statement  and  proof  for  September,  .    .  192 

Price  lists,  August  and  September, 194 

Review  questions,  August  and  September,  .    .  196 

Model  single  entr^^  journal, 198 

Model  abstract  sales  book, 201 

Model  purchase  book, 202 

Model  cash  book, 204 

Model  ledger  card, 207 

Work  for  the  student,  October, 208 

Model  statement  of  Resources  &  Liabilities,   .  216 

Work  for  the  stvident,  November, 21S 

Review  questions,  October  and  November,  .    .  226 

Joint  stock  companies  and  corporations,  .    .    .  227 

Model  stock  certificate, 232 

Opening  the  books  of  a  corporation, 234 

Model  voucher, 238 

Work  for  the  student,  December, 242 

Model  journal, 244 

Model  sales  book, 245 

Model  cash  book , 246 

Model  voucher  register, 246 

Model  petty  cash  book, 250 

Model  statement  of  losses  &  gains, 258 

Model  statement  of  resources  &  liabilities,  .    .  260 

Directions  for  closing  the  ledger, 260 

Review  questions,  December, 262 

Appendix,      263 


MODERN  ILLUSTRATIVE  BOOKKEEPING. 


Bookkeeping  is  the  art,  method,  or  practice  of  recording  business  transactions. 
There  are  two  methods,  termed  Single  Entry  and  Double  Entry. 

Object  of  Bookkeepiiii--. — The  object  of  bookkeeping  is  to  enable  the  proprietor  at 
any  time  to  determine  whether  his  business  is  being  conducted  at  a  profit  or  a  loss,  the 
sources  from  which  the  profits  or  losses  arise,  and  to  afford  a  record  of  all  debts  due  and 
all  property  belonging  to  the  business  and  a  record  of  all  debts  due  by  the  business. 

Single  Entry  Bookkeeping-  usually  provides  for  keeping  accounts  with  persons  only. 

Double  Entry  Bookkeeping  provides  for  keeping  accounts  with  persons,  property, 
expenses  and  allowances. 

Books  Required.  The  books  required  depend  upon  the  nature  of  the  business,  but 
a  complete  record  of  any  business  may  be  kept  in  two  books — the  Journal-Daybook  and 
the  Ledger. 

Tbe  Journal-Daybook.  This  book  contains  a  record  of  each  transaction  as  it  takes 
place,  and  also  the  names  of  the  accounts  affected  by  the  transaction,  showing  which 
accounts  are  debited  and  which  are  credited. 

The  Ledger.  This  book  contains  the  names  of  all  accounts  occurring  in  the  journal, 
with  all  debits  from  the  journal  carried  to  the  debit  or  left-hand  side  of  the  ledger  accounts, 
and  all  credits  to  the  credit  or  right-hand  side,  so  that  a  ledger  account  will  show  upon 
its  face  all  transactions  by  which  that  account  has  been  affected  in  the  course  of  the  busi- 
ness as  recorded  in  the  journal-daj'book. 

Auxiliary  Books. — Ever}-  business  will  keep  such  auxiliary  books  of  record  as  the 
nature  of  the  transactions  may  require. 

WORK    FOR  THE   STUDENT. 

Xo.  1. — Take  a  sheet  of  journal  paper  and  carefully  copy  the  model  journal  shown  on 
pages  6  and  7,  following  carefully  the  script  forms  of  both  letters  and  figiu^es. 

No.  2. — Take  a  sheet  of  ledger  paper  and  carefully  copy  the  model  ledger  shown  on 
pages  8  and  9,  writing  four  accomits  on  a  page.  Be  careful  to  make  plain,  neat  figures. 
Make  the  ledger  headings  larger  than  ordinary  writing,  and  see  that  each  heading  is 
written  in  the  center  of  the  page,  so  that  the  double  lines  which  divide  the  page  into 
two  equal  parts  will  come  exactly,  or  nearly,  in  the  middle  of  the  heading. 

Do  your  very  best  work  both  in  the  journal  and  ledger  exercises,  for  they  will  not  be 
accepted  unless  the  w-riting  is  legible  and  neat,  and  the  figures  plain. 

Present  your  work  to  3'our  teacher  for  examination  and  approval. 


6 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


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10 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


WORK    FOR  THE    STUDENT. 


GENERAL   RULES  FOR   DEBITING  AND  CREDITING. 


Rule  1. — Debit  what  the  business  receives,       Rule  2. — Credit  what  the  biisi?iess  disposes 
or  what  costs  value.  of,  or  what  produces  value. 

To  BE  Entered  in  the  Journai^-Daybook. 

Make  the  entries  required  by  the  following  transactions  similar  in  form  to  those  shown 
in  model  journal-daybook  on  pages  6  and  7. 

No.  1. — ^January  i,  190-.  I  (your  name)  engage  in  the  Flour  and  Grain  business, 
investing  cash,  $4000. 

Instructions. — Whatever  the  business  receives,  or  what  comes  into  the  business, 
should  be  debited;  that  is,  it  should  be  entered  on  the  left-hand  side  of  your  journal- 
daybook.  In  this  instance  the  business  has  received  cash  to  the  amount  of  $4000,  hence 
Cash  should  be  debited. 

WTiatever  the  business  disposes  of,  or  whatever  produces  value  to  the  business,  should 
be  credited;  that  is,  it  should  be  entered  on  the  right-hand  side  of  your  journal-daybook. 
In  this  instance  the  proprietor  has  produced,  or  given,  value  to  the  business  to  the  amount 
of  $4000  by  making  an  investment,  hence  the  Proprietor  should  be  credited. 

The  following  illustrates  the  form  of  the  entrj^  though  the  amounts  and  explanation 
are  different: 


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Make  an  entry  in  3'our  journal-daybook  according  to  the  above  form.  Write  your 
name  instead  of  that  of  F.  W.  I^eonard,  and  place  $^000  opposite  Cash,  and  $^000  oppo- 
site your  name,  instead  of  the  amounts  shown  in  model.  The  amount  placed  in  the  left- 
hand  column  of  your  journal-daybook  should  be  the  same  as  that  placed  in  the  right-hand 
column;  in  other  words,  your  debits  and  credits  should  alwaj^s  be  equal. 

The  name  of  the  account  debited  is  placed  near  the  vertical  lines  at  the  left,  and  the 
amount  placed  in  the  left-hand  money  column. 

The  name  of  the  account  credited  is  written  one  line  below  the  debit,  and  about  three- 
fourths  of  an  inch  farther  to  the  right.  The  credit  amount  is  placed  in  the  right-hand 
money  column. 


Rule  3. — Debit  Cash  for  all  cash  received. 


MODERN  "ILLUSTRATIVE    BOOKKEEPING. 


11 


The  term  "cash"  includes  specie  (gold,  silver,  nickel  and  bronze),  treasury  notes, 
national  bank  notes,  gold  and  silver  certificates,  checks,  post-office  money  orders,  express 
money  orders,  bank  drafts,  and  certificates  of  deposit. 

Rule  4. — Credit  the  Proprietor  with  all  amounts  which  he  invests  in  the  business. 

No.  2. — January  2,  190-.     Paid  J.  C.  Smith  $75  for  one  month's  rent  of  store. 

Instructions. — Whatever  costs  the  business  value  should  be  debited.  In  this  instance 
you  have  paid  $75  rent  for  the  benefit  of  the  business.  Rent  has  cost  the  business  value. 
It  is  an  expense  to  the  business,  hence  Expense  should  be  debited. 

Cash  has  been  disposed  of.  It  has  produced  value  to  the  business;  that  is,  it  has  been 
used  by  you  to  pay  the  rent  of  your  store,  hence  Cash  should  be  credited. 

The  following  illustrates  the  form  of  your  entry,  though  the  amounts  and  explanation 
are  different. 


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Before  attempting  to  make  the  above  entry,  examine  the  model  journal-daj'book  on 
page  6  so  as  to  be  sure  of  the  form  and  arrangement.  Do  not  copy  the  illustrations,  but 
make  entries  similar  to  them.  Your  entries  must  be  made  for  the  transactions  given,  and 
your  amounts  must  be  the  amounts  given  in  the  transactions,  and  not  the  amounts  shown 
in  the  illustrations.  Leave  one  blank  line  after  each  transaction,  and  write  the  date  in 
the  center  of  this  line,  using  ditto  marks  if  the  date  be  the  same  as  that  of  the  preceding 
transaction. 

Rule  5. — Debit  Expense  for  all  expenses  of  the  business. 

The  expenses  of  a  business  include  such  items  as  outlays  for  rent,  postage  stamps,  sta- 
tionery, fuel,  light,  clerk  hire,  etc. 

Rule  G. — Credit  Cash  for  all  amounts  which  are  paid  out,  or  taken  from  the  business. 

No.  3. — January  2,  190-.  Bought  of  Scran tom  &  Wetmore,  books  and  stationery 
for  office  use,  for  which  I  paid  cash,  $15. 

Instructions. — This  transaction  is  of  the  same  nature  as  the  preceding  one.  Debit 
Expense  (see  rule  5);  credit  Cash  (see  rule  6). 

In  the  right-hand  half  of  the  wide  space  in  3- our  journal-daA-book  is  written  a  complete  record  of  the 
transaction.  This  record  should  be  as  brief  as  possible,  yet  it  must  show  exactly  what  took  place,  for 
should  any  dispute  arise  it  is  this  record  and  not  the  journal  entry  nor  ledger  record  that  will  be  used  as 
evidence. 

No.  4. — ^January  3,  190-.  Bought  of  the  Upton  Coal  Co.  for  cash,  for  use  in  store, 
5  tons  of  coal  at  $5.50  per  ton;  total,  $27.50. 

Instructions. — As  the  coal  is  to  be  used  for  fuel,  it  becomes  an  expense  to  the  busi- 
ness. Make  entry  similar  to  transactions  Nos.  2  and  3.  Determine  the  debit  by  reading 
rule  5;  determine  the  credit  by  reading  rule  6. 


12 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


No.  5. — January  3,  190-.     Paid  postmaster  $10.50  for  500  stamped  envelopes. 

No.  «. — January  4,  190-.  Bought  of  P.  D.  Hamlin,  for  cash,  100  brls.  flour  at  $3.90 
per  brl.,  400  bu.  oats  at  35^/  per  bu.;  total,  $530. 

Instructions. — Goods  which  j^ou  buy  with  the  intention  of  selling  are  called  "  mer- 
chandise." You  have  bought  $530  worth  of  flour  and  oats  for  this  purpose,  hence  Mer- 
chandise  should  be  debited.  You  have  paid  out  or  disposed  of  cash  to  the  amount  of  $530, 
hence  Cash  should  be  credited.  The  following  is  the  form  of  your  entry,  though  the 
amounts  and  explanation  are  different. 


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Rule  7. — Debit  Merchandise  for  all  goods  which  you  buy  for  the  purpose  of  selling. 
No.  7. — January  4,  190-.     Bought  of  Charles  A.  Hubbard,  for  cash,  1000  bu.  oats 
at  30^'  per  bu.;  total,  $300. 

Instructions. — This  transaction  is  similar  to  the  preceding  one.  Merchandise  should 
be  debited  (see  rule  7);   Cash  should  be  credited  (see  rule  6). 

No.  8. — January  4,  190-.  Bought  of  M.  F.  lyynch,  for  cash,  500  bu.  corn  at  35^'  per 
bu.;  total,  $175. 

Instructions. — Make  entry  similar  to  transaction  No.  6.  Determine  the  debit  by 
reading  rule  7;  determine  the  credit  by  reading  rule  6. 

No.  O.^January  4,  190-.  Bought  of  H.  P.  Dennis  &  Co.,  for  cash,  100  bu.  rye  at 
^o<l:  per  bu.,  50  brls.  flour  at  $4.10  per  brl.;  total,  $255. 

No.  10. — ^January  5,  190-.  Sold  Wilson  Bros.,  for  cash,  100  bu.  rye  at  6o<!  per  bu., 
50  brls.  flour  at  $4.50  per  brl.;  total,  $285. 

Instructions. — Cash  should  be  debited  when  it  is  received,  or  comes  into  the  busi- 
ness; and  Merchandise  should  be  credited  when  it  is  sold,  or  goes  out  of  the  business. 
The  following  illustrates  the  form  of  your  entry,  though  the  amounts  and  explanation 
are  different. 


■-<::£^^-i^-^..,i^6Aj!:^^  y^y^ 


j- 


2-2?^ 


--■l^^iyC^  ,~VKy^czyt^^-£^        J'oTjz! 


Rule  8. — Credit  Merchandise  for  all  goods  which  you  sell. 


^rir- 


^f'J- 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  13 

Ifio.  11. — January  6,  190-.  Sold  H.  A.  Harvey,  for  cash,  400  bu.  oats  at  35'/  per 
bu.;  total,  $140. 

Instructions. — Make  entry  similar  to  preceding  transaction.  Determine  the  debit 
by  reading  rule  3;  determine  the  credit  by  reading  rule  8. 

No.  12. — ^January  6,  190-.  Sold  W.  D.  Menter,  for  cash,  200  bu.  corn  at  40^/  per 
bu.;  total,  $80.      (Entr}- similar  to  transaction  No.  10.) 

Xo.  1.3. — January  6,  190-.  Sold  J.  B.  Hamill,  for  cash,  200  bu.  oats  at  36^  per  bu., 
100  bu.  corn  at  405/'  per  bu.;  total,  $112. 

POSTING. 

At  such  times  as  may  be  convenient,  the  bookkeeper  transfers  the  items  from  his  jour- 
nal (in  which  they  have  been  entered  daily  as  the  transactions  have  occurred)  to  the  ledger. 

Transferring  entries  from  the  journal  to  the  ledger  is  called  "posting,"  and  %Yhen 
cornpleted  all  the  debit  cash  items  in  the  journal  will  appear  on  the  debit  side  of  the  Cash 
account  in  the  ledger,  and  the  credit  cash  items  in  the  journal  will  appear  on  the  credit 
side  of  the  Cash  account  in  the  ledger.  (See  Cash  account  in  model  ledger,  page  8.) 
All  debit  merchandise  items  in  the  journal  will  appear  on  the  debit  side  of  the  Merchan- 
dise account  in  the  ledger,  and  all  credit  merchandise  items  in  the  journal  will  appear  on 
the  credit  side  of  the  Merchandise  account  in  the  ledger;  and  the  same  will  be  true  of 
Expense  account,  the  proprietor's  account,  and  such  other  accounts  as  the  business  may 
have. 

There  is  no  stated  time  at  which  posting  should  be  done.  In  the  busy  office  it  is  generally  done  at 
odd  times,  when  the  bookkeeper  is  not  otherwise  occupied,  but  it  must  be  completed  at  the  close  of  each 
month,  in  order  to  take  a  trial  balance. 

\\'hen  posting,  the  utmost  care  should  be  exercisdd  that  all  debit  items  be  carried  to  the  debit  side  of 
the  proper  accounts  in  the  ledger,  and  all  credit  items  to  the  credit  side  of  the  proper  accounts  in  the 
ledger. 

It  is  quite  a  common  error  to  post  a  debit  item  to  the  credit  side,  or  a  credit  item  to  the  debit  side  of 
an  account,  especially  when  the  student  is  taught  to  post  alternate  debits  and  credits.  The  practical 
bookkeeper  rarely  posts  in  this  manner,  but  instead  posts  first  all  his  debits,  then  all  his  credits.  As  he 
is  at  all  times  posting  to  only  one  side  of  the  ledger,  he  reduces  to  the  minimum  the  danger  of  posting 
an  amount  to  the  wrong  side  of  an  account. 

Opening-  Ledger  Acconnts. — Examine  the  model  ledger  on  page  8,  and  notice  the 
form  and  arrangement  of  the  accounts.  Take  a  sheet  of  ledger  paper  and  open  accounts 
as  follows:  At  the  top  of  the  first  page  write  your  own  name.  (For  form,  see  account 
of  A.  H.  Harper  in  model  ledger,  page  8.)  See  that  each  name  is  in  the  center  of  the 
page.  On  the  fifth  line  below  write  Cash;  12  lines  below  Cash  write  Merchandise ;  12 
lines  below  Merchandise  write  Expense.  Number  your  journal  page  i;  number  j^our 
ledger  page  i . 

SUCCESSIVE    STEPS. 

First  Step. — All  amounts  in  the  debit  money  column  of  j'our  journal  are  carried  to 
the  left-hand  or  debit  side  of  your  ledger.  All  amounts  in  the  credit  monej^  column  of 
your  journal  are  carried  to  the  credit  or  right-hand  side  of  your  ledger. 

The  first  item  on  the  debit  side  of  your  journal  is  Cash;  the  amount  is  $^000.  Turn 
to  the  Cash  account  in  j^our  ledger  and  write  the  amount  on  the  debit  side  of  this  account. 
Place  the  page  of  the  journal  (i)  in  the  folio  coltmm  of  the  ledger,  and  write  the  date  on 


u 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


which  the  journal  entrj^  was  made  (Jan.  i)  in  the  date  coltunn  of  the  ledger,  placing  the 
current  year  above  the  first  entrj^  in  the  date  column  for  the  pin-pose  of  indicating  the 
year.     The  following  illustrates  the  form  of  5'our  ledger  entry. 


!VO 


/  ^  G  ' 


r/ 


4^i?  t?  <f 


Next  enter  the  page  of  the  ledger  (i)  in  the  folio  column  of  the  journal.     The  fol- 


lowing illustrates  the  form. 


/^7^-«?<??^-^' 


•(_^^:^?-z^«i-£//-z^<?^-^^^^-<:^ 


^•^-i;e^^<?^  ' 


yt>t:i..<d-'^Z^ 


'■^£>  CP  tP 


A^iP  C  IP 


In  posting  always  place  the  number  of  the  page  of  the  journal  from  which  the  amount 
is  posted  in  the  folio  column  of  your  ledger,  and  place  the  number  of  the  page  of  5'Our 
ledger  on  which  the  account  is  written  in  the  folio  column  of  j'our  journal.  This  is  termed 
"  postmarking." 

Second  Step. — All  the  debits  in  your  journal  should  be  posted  first,  then  the  credits. 

The  next  debit  item  in  your  journal  is  Expense;  the  amount  is  ^75.  Turn  to  3'our 
Expense  account  in  the  ledger  and  write  ^75  in  the  amount  column.  Place  the  page  of  the 
journal  (i)  in  the  folio  column,  and  the  date  of  the  transaction  (Jan.  2)  in  the  date 
column.     The  following  illustrates  the  form  of  your  ledger  entrj'. 


O^. 


IZ'-T^^Z- 


7' 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


15 


Place  the  page  of  your  ledger  (i)  in  the  folio  column  of  your  journal.  (For  form  of 
entry,  see  illustration  of  journal  in  first  step;  also  see  model  journal  on  page  6.) 

Third  Step. — The  next  item  on  the  debit  side  of  your  journal  is  Expense;  the  amount 
is  $15.  Turn  to  the  Expense  account  in  your  ledger  and  place  the  amount  on  the  debit 
side,  writing  the  page  of  the  journal  in  the  folio  column  of  the  ledger,  and  the  date  (Jan. 
3)  in  the  date  column  of  the  ledger.  The  following  illustrates  the  form  of  the  entry, 
showing  the  Expense  account  as  it  should  appear  in  your  ledger  at  the  present  time. 


3 


7 


Write  the  page  of  the  ledger  in  the  folio  column  of  your  journal. 

Fourth  Step. — The  next  item  on  the  debit  side  of  your  journal  is  Expe^ise;  the  amount 
is  $2^.5 o.  Post  this  to  your  ledger,  as  previously  instructed.  The  following  illustrates 
the  form  of  an  Expense  account  with  three  items  entered  thereon. 


■2- 


3 


3 


/ 

7^ 

/ 

/J 

/ 

V 

j-a 

Fifth  Step. — The  next  item  on  the  debit  side  of  your  journal  is  Expense;  the  amount 
is  $10.^0.  Post  as  before  to  the  left-hand  side  of  Expense  account  in  the  ledger.  Do  not 
neglect  to  place  the  ledger  page  in  the  folio  column  of  your  journal. 

Sixth  Step. — The  next  item  on  the  debit  side  of  your  journal  is  Merchandise;  the 
amount  is  $S3o.  Post  this  to  your  ledger  as  previously  instructed.  The  following  illus- 
trates the  form  of  the  entry. 


^i^^^z^^^-^-^^^^/ld^^ 


2-<?Z-' 


^/ 


J'J  C 


16 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Seventh  Step. — The  next  item  on  the  debit  side  of  your  journal  is  Merchandise ;  the 
amount  is  $300.     Post  this  to  your  ledger  according  to  previous  instructions. 

The  following  illustrates  the  form  of  the  ISIerchandise  account  as  it  should  appear  in 
your  ledger  at  the  present  time. 


/^. 


V 


^-^^2.c^^^ 


3  CP  0 


Eighth  Step. — The  next  item  on  the  debit  side  of  your  journal  is  Merchandise;  the 
amount  is  $175.     Post  this  to  the  debit  side  of  3^our  Merchandise  account. 

The  following  illustrates  the  form  of  the  Merchandise  account  as  it  should  appear  in 
your  ledger  at  the  present  time. 


/ 

-J-J  i) 

/ 

3  £>  i? 

/ 

V^ 

4^ 


Ninth  Step. — The  next  item  on  the  debit  side  of  your  journal  is  Merchandise;  the 
amount  is  $2^^.     Post  this  to  the  debit  side  of  your  Merchandise  account. 

Tenth  Step. — The  next  item  on  the  debit  side  of  your  journal  is  Cash;  the  amount 
is  $28^.     Post  this  to  the  debit  side  of  your  Cash  account. 

The  following  illustrates  the  form  of  the  Cash  account  as  it  should  appear  in  your  ledger 
at  the  present  time. 


^^t7^. 


'Z' 


A^  (P  tP  c 

2.  ci"^ 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


17 


Eleventh  Step. — The  next  item  on  the  debit  side  of  your  journal  is  Cash;  the 
amount  is  $i^o.  Turn  to  the  Cash  account  in  your  ledger  and  make  entry  on  the  debit 
side,  placing  $i^o  in  the  amount  column,  the  page  of  your  journal  in  the  folio  column, 
the  date  of  the  transaction  (Jan.  6)  in  the  date  column.  Place  the  ledger  page  in  the 
journal  folio  column. 

Twelfth  Step. — The  next  item  on  the  debit  side  of  your  journal  is  Cash;  the  amount 
is  $80.     Post  this  amount  to  the  debit  side  of  the  Cash  account  in  your  ledger. 

Thirteenth  Step. — The  next  and  last  item  on  the  debit  side  of  your  journal  is  Cash; 
the  amount  is  $112.     Post  this  to  the  debit  side  of  the  Cash  account,  as  previously  instructed. 

You  should  now  have  five  items  on  the  debit  side  of  your  Cash  account;  namety,  $4000, 
$285,  $140,  $80,  and  $112.  All  the  items  on  the  debit  or  left-hand  side  of  your  journal 
have  now  been  transferred  to  the  debit  or  left-hand  side  of  yoiir  ledger. 

Fourteenth  Step. — As  you  have  finished  posting  the  debit  items,  you  should  next 
post  the  credit  items  of  3'our  journal  to  the  credit  or  right-hand  side  of  your  ledger. 

The  first  credit  item  in  your  journal  is  that  in  which  you  are  credited  with  your  invest- 
ment, $^000.  This  should  be  transferred  to  your  account  on  the  credit  side  of  the  ledger. 
The  following  illustrates  the  form  of  the  ledger  entry. 


^:;^^-^^ 


'^<7   - 


dZyy^Z^^  / 


A^C?  ^  £P 


Be  sure  to  place  the  page  of  your  ledger  in  the  folio  column  of  the  journal  immediately 
preceding  your  name. 

Fifteenth  Step. — The  next  credit  item  in  3'our  journal  is  Cash;  the  amount  is  $j^. 
Transfer  the  amount  to  the  credit  side  of  the  Cash  account  in  the  ledger. 

The  following  illustrates  the  form  of  the  Cash  account  in  your  ledger  as  it  should 
appear  at  the  present  time. 


l^. 


cT- 


J~ 


Com. — 2 


/  /  Z- 


■■  f- 


Z- 


/^ 


18 


MODERN    ILLUSTRAriVE    BOOKKEEPING. 


Sixteenth  Step. — Transfer  the  remaining  credit  items  of  j-our  journal-daj^book  to 
your  ledger.  (For  form  of  ledger  showing  accounts  with  several  items  entered  thereon, 
see  model  on  page  8. )  The  Cash  account  in  j'our  ledger  will  contain  eight  credit  amounts, 
and  the  IMerchandise  account  four  credit  amounts. 

All  the  credit  items  of  your  journal  have  now  been  transferred  to  the  credit  or  right- 
hand  column  of  your  ledger. 

As  the  amounts  in  the  debit  and  credit  columns  of  the  journal  are  equal,  it  is  evident, 
if  you  have  made  no  mistake  in  transferring  the  entries,  that  the  amounts  on  the  debit 
and  credit  sides  of  your  ledger  must  also  be  equal;  that  is,  that  the  sum  of  the  amounts 
on  the  debit  side  of  your  ledger  should  equal  the  sum  of  the  amounts  on  the  credit  side 
of  j'-our  ledger.     To  ascertain  if  this  is  true,  we  take  what  is  known  as  a  trial  balance. 


TRIAL    BALANCE 

Take  a  sheet  of  journal  paper,  write  the  words  Trial  Balance  at  the  top,  and  under  it, 
at  the  left,  write  the  names  of  all  the  accounts  that  appear  in  yowx  ledger,  with  the  ledger 
page  in  the  folio  column.     The  following  illustrates  the  form. 


^     i^.^^^^^(^,  Z^^- 


/ 

/ 
/ 


The  names  of  the  accounts  in  the  left-hand  colunni  must  be  the  names  of  the  accounts 
in  your  ledger. 

The  footing  of  the  debit  side  of  all  the  accounts  in  j^our  ledger  must  be  entered  in  the 
debit  or  left-hand  column  of  your  trial  balance.  The  footing  of  the  credit  side  of  all  the 
accounts  in  3'our  ledger  must  be  entered  in  the  credit  or  right-hand  column  of  j'our  trial 
balance. 

The  first  account  in  the  ledger  is  the  proprietor's  (your  own)  account.  There  is 
nothing  on  the  debit  side,  hence  no  entry  will  be  made  in  the  debit  column  of  your  trial 
balance.  There  is  $^000  on  the  credit  side  of  your  account.  Enter  this  amount  ($4000) 
in  the  credit  or  right-hand  column  of  your  trial  balance.  The  following  illustrates  the 
form;  the  amount  is  diiferent. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


19 


^Zy^^i^^,  /a<^~ 


y<?^Z^'tZ'<f'>^Z,-C^ 


3<P^<p 


Find  the  sum  of  the  several  items  on  the  debit  side  of  your  Cash  account,  and  write 
the  amount  in  small,  light  lead-pencil  figures. 

The  following  illustrates  the  form  of  a  Cash  account  properly  footed;  the  amounts  are 
different  from  those  shown  in  your  Cash  account. 


/ 


/ 
z 


^  O  C'  C' 
2  2^ 


62 


Z 


Z(P  ^ 

/       d     3     / 


Transfer  the  debit  footing  of  your  Cash  account  ($4617)  to  the  debit  column  of  yoiu: 
trial  balance,  writing  the  amount  directly  opposite  the  word  Cash. 

Foot  the  credit  side  of  your  Cash  account  and  transfer  the  footing  ($1388)  to  the 
credit  column  of  your  trial  balance  directly  opposite  the  word  Cash.  The  following 
illustrates  the  form;  the  amounts  are  different. 


^ly^^l^^,  /a<^- 


/ 


/~ 


- -'^^^:^^^-'^:z:^^£<^2-^^ 


^^?-Z-'22-<?^?'Z-^S--' 


<^/ 


7/ 


3  £^  iZ  O 

/  ^3  / 


20 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Foot  the  debit  and  credit  sides  of  3'our  Merchandise  account,  writino^  the  footine  in 
lead-pencil  figures,  as  previously  explained.  Transfer  the  footing  of  the  debit  side  to  the 
debit  column  of  your  trial  balance,  and  the  footing  of  the  credit  side  to  the  credit  column 
of  A^our  trial  balance. 

Foot  the  debit  side  of  j'our  Expense  account,  and  transfer  the  footing  to  the  debit 
side  of  your  trial  balance.  There  is  nothing  on  the  credit  side  of  j^our  Expense  account. 
(For  form  of  complete  trial  balance  having  amounts  entered  thereon,  see  below.) 

Add  both  the  debit  and  the  credit  columns  of  3^our  trial  balance;  the  footings  should 
be  equal.  If  the  footings  of  the  debit  and  credit  columns  of  5' our  trial  balance  are  not 
equal,  it  is  evident  that  an  error  has  been  made,  and  you  should  review  3'our  calculations 
and  find  the  mistake. 

The  following  is  the  form  of  a  trial  balance  contaijiing  the  same  number  of  items 
found  in  vour  trial  balance.     The  amounts  are  different. 


^^^<^^</,  /^  ^— 


/ 

/ 
/ 

62  ^  <9 
6  /  ^  ^ 

J  C  (P  (P 

/  Z^^2- 

\ 

Note. — All  ruling  should  be  done  in  red  ink  unless  otherwise  instrticted  by  the  teacher. 

The  footing  of  your  trial  balance  should  be  $6005. 

Present  your  journal,  ledger  and  trial  balance  to  your  teacher  for  approval.  Do  not 
attempt  any  further  work  until  your  teacher  certifies  to  the  correctness  of  what  }'ou  have 
alreadv  done. 


I 
2 

3 

4 

5 
6 

7 
8 

9 
10 


QUESTIONS. 

Define  double  entry  bookkeeping. 

What  books  are  required  to  make  a  complete  record  of  any  business  ? 

What  should  the  journal-daybook  contain  ? 

What  should  the  ledger  contain  ? 

What  is  the  general  rule  for  debits  ?     For  credits  ? 

What  does  the  term  ' '  cash  ' '  include  ? 

When  should  the  Cash  account  be  debited  ? 

When  should  the  Expense  accotmt  be  debited  ? 

What  items  should  be  charged  to  the  Expense  account  ? 

AVhen  should  the  Cash  account  be  credited  ? 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  21 

1 1 .  What  do  you  understand  by  the  term  ' '  merchandise ' '  ? 

12.  When  should  the  Merchandise  account  be  debited? 

13.  When  should  the  Merchandise  account  be  credited? 

14.  Define  posting. 

15.  Wlien  should  posting  be  done? 

16.  Upon  which  side  of  the  ledger  accounts  should  all  items  in  the  left-hand  money 
column  of  the  journal  appear  ?  Upon  which  side,  all  those  in  the  right-hand  money  column 
of  the  journal  ? 

17.  What  is  the  object  of  a  trial  balance? 

18.  How  often  should  a  trial  balance  be  taken? 

19.  What  names  should  appear  in  a  trial  balance? 

20.  Wliy  should  the  debit  and  credit  columns  of  a  trial  balance  show  equal  footings? 


22  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

WORK    FOR   THE    STUDENT. 
To  BE  Entered  ix  the  Journal-Daybook. 

No.  1, — February  i.  I  (your  name)  engage  in  the  Flour  and  Grain  business,  invest- 
ing cash,  $2500. 

Instructions. — Write  February  i  at  the  top  of  your  journal-daybook  (see  model, 
page  6).  Determine  the  debit  by  reading  rule  3,  page  10;  determine  the  credit  by  read- 
ing rule  4,  page  11.     For  form  of  entry  similar  to  this,  see  transaction  No.  i,  page  10. 

]Vo.  2. — February  2.     Paid  Henry  Jones  one  month's  rent  of  store,  in  cash,  $50. 

Instructions. — Determine  the  debit  by  reading  rule  5,  page  11;  determine  the  credit 
by  reading  rule  6,  page  11.  For  form  of  entry  similar  to  this,  see  transaction  No.  2, 
page  II. 

No.  :5. — February  3.  Bought  of  R.  C.  Thompson,  for  cash,  200  brls.  flour  at  $4  per 
brl.;  total,  $800. 

Instructions. — Determine  the  debit  by  reading  rule  7,  page  12;  determine  the  credit 
by  reading  rule  6,  page  11.  For  form  of  entry  similar  to  this,  see  transaction  No.  6, 
page  12. 

No.  4. — February  4.  Sold  A.  H.  Warren,  for  cash,  50  brls.  flour  at  $4.50  per  brl.; 
total,  $225. 

Instructions. — Determine  the  debit  by  reading  rule  3,  page  10;  determine  the  credit 
by  reading  rule  8,  page  12.  For  form  of  entry  similar  to  this,  see  transaction  No.  10, 
page  12. 

No.  5. — February  6.  Bought  from  Winter  Bros.,  for  cash,  600  bu.  of  corn  at  35'/' 
per  bu.;  total,  $210.      (Entry  similar  to  transaction  No.  3.) 

No.  6. — February  7.  Sold  Wm.  Archer  &  Co.,  for  cash,  50  brls.  flour  at  $4.50  per 
brl.,  200  bu.  corn  at  40'/-  per  bu.;  total,  $305.      (Entry  similar  to  transaction  No.  4.) 

No.  7. — February  8.  Bought  of  Arthur  McMillan,  for  cash,  100  brls.  flour  at  $3.90 
per  brl.,  1200  bu.  oats  at  33'/' per  bu.;    total  $786.      (Entry  similar  to  transactions  Nos. 

3  and  5.) 

No.  8.-^February  9.  Paid  clerk  hire,  in  cash,  $15,  insurance,  $10;  total,  $25. 
(Determine  the  debit  by  reading  rule  5,  page  11.) 

No.  9. — February  10.  Sold  E.  H.  French  &  Co.,  for  cash,  25  brls.  flour  at  $4.50 
per  brl.,  300  bu.  oats  at  38/'  per  bu.,  200  bu.  corn  at  40  ■  per  h\\.\   total,  $306.50. 

No.  10. — February  12.  Bought  of  John  C.  Cornell,  for  ca.sh,  200  bu.  rye  at  55^' 
per  bu.;  total,  $110. 

No.  11. — Open  the  following  accounts  in  your  ledger,  leaving  space  as  indicated. 
(Student's  name),  top  of  page  i.  Merchandise,  nth  line,  page  i.  Expense,  top  of 
page  2.     Cash,  top  of  page  3. 

No.  12. — Post  the  transactions  from  your  journal-daybook  to  your  ledger.  For 
explanation  of  posting,  see  page  13. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


23 


Xo.  13. — Take  a   trial  balance  from  your  ledger.      See  form   and  explanation  on 
page  1 8. 

No.  14. — Submit  your  journal-daybook,  ledger  and  trial  balance  to  your  teacher  for 
inspection  and  approval. 


GENERAL   RULE   FOR   PERSONAL  ACCOUNTS. 

Persons  are  Debited  when  they  become  i7i-      Perso7is  are  Credited  when  the  hisiness  be- 
debted  to  the  business,  or  when  the  business  comes  indebted  to  them,  or  whe7i  they  pay 

pays  them  on  accotint.  the  business  on  accoinit. 

Enter  the  following  transactions  in  your  journal-daybook,  commencing  directh'  under 

those  that  you  have  previously  entered  for  the  month  of  February. 

Xo.  15. — February  14.  Bought  of  A.  J.  lyane,  on  account,  30  days,  250  bu.  oats  at 
330  per  bu.;  total,  $82.50. 

Instructions. — Whenever  you  buy  goods  from  a  person  without  paying  for  them  at 
the  time  of  purchase,  the  goods  are  said  to  be  bought  on  account,  and  the  person  from 
whom  you  buy  should  be  credited,  because  he  has  produced  value  to  your  business  by 
delivering  to  you  a  certain  quantity  of  goods.  In  this  instance  j^ou  have  received  mer- 
chandise, hence  Merchayidise  should  be  debited.  The  merchandise  was  purchased  from 
A.  J.  lyane,  who  merely  has  your  oral  or  implied  promise  to  pay,  hence  A.  J.  Lane  should 
be  credited.  The  following  illustrates  the  form  of  your  entry,  though  the  amounts  and 
explanation  are  different. 


yVC^t^^^'d--^^ , 


/Ty^Y-r*:::^^ 


/y/ 


7' 


■  (P 


Rule  9. —  Whe7iever  you  purchase  goods  without  paying  for  them  at  the  time  of  purchase, 
credit  the  -Per sorf front  whom  the  goods  are  bought. 

No.  16. — February  15.  Bought  of  W.  H.  Stevens,  on  account,  600  bu.  oats  at  33^ 
per  bu.;  total,  $198- 

Instructions. — This  transaction  is  similar  to  the  preceding  one.  Debit  Merchandise 
(see  rule  7);  credit  W.  H.  Stevens  (see  rule  9). 

Xo.  17.— February  15.  Bought  of  F.  A.  Smith  &  Co.  on  account,  10  days,  300  bu. 
rye  at  55^  per  bu.;  total,  $165.  (Determine  the  debit  by  reading  rule  7;  determine  the 
credit  by  reading  rule  9.) 

Xo.  18. — February  16.  Sold  W.  A.  Scott  on  account,  10  days,  200  bu.  oats  at  2)^'p 
per  bu.;  total,  $72. 

Instructions. — Whenever  you  sell  merchandise  without  receiving  payment  therefor 
at  the  time  of  sale,  the  goods  are  said  to  be  sold  on  account,  and  the  person  to  whom  the 
goods  are  sold  should  be  debited.  In  this  instance  W.  A.  Scott  has  purchased  from  you 
$72  worth  of  merchandise  without  making  payment  therefor;  you  simply  have  his  oral  or 


24 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


implied  promise  to  pay.  W.  A.  Scott  has  cost  the  business  value;  that  is,  he  has  received 
merchandise  from  your  business,  hence  IV.  A.  Scott  should  be  debited  and  JMerchandise 
credited.  The  following  illustrates  the  form  of  your  entry,  though  the  amounts  and 
explanation  are  different. 


^^Aj-£? 


-^cTiP 


Rule   10. —  Wlienever  you  sell  goods  without  receiving  payment  therefor  at  the  time  of 
sale,  debit  the  Person  to  whom,  the  goods  are  sold. 

No.  19. — February  17.  Sold  S.  A.  Dodge  &  Co.  on  account,  60  days,  50  brls.  flour 
at  $4.75  per  brl.;  total,  $237.50. 

Instructions. — This  transaction  is  similar  to  the  preceding  one.  Debit  kS.  A.  Dodge 
&  Co.  (see  rule  10);  cxeAii  Merchandise. 

No.  20. — February  17.  Sold  J.  S.  Sumner,  on  account,  500  bu.  rye  at  6of  per  bu., 
500  bu.  oats  at  36^'  perbu.,  600  bu.  corn  at  40/'  per  bu.;  total,  $720.  (Determine  the 
debit  by  rule  10;  determine  the  credit  by  rule  8.) 

No.  21. — February  19.  Sold  E.  H.  French  &  Co.  on  account,  10  days,  50  brls.  flour 
at  $4.60  per  brl.,  200  bu.  oats  at  36'/  per  bu.,  100  bu.  corn  at  40;;^'  per  bu.;  total,  $342. 

No.  22. — February  20.  Sold  E.  B.  Adams,  for  cash,  400  bu.  oats  at  38'/  per  bu.; 
total,  $152.      (Determine  the  debit  by  rule  3;  determine  the  credit  by  rule  8.) 

N<).  23. — February  23.  Bought  of  Rice,  Miller  &  Co.  on  account,  30  days,  250  bu. 
rye  at  57^'  per  bu.,  600  bu.  corn  at  35'/  per  bu.;  total,  $352.50.  (Entry  similar  to  trans- 
action No.  15.) 

No.  24. — February  24.  Sold  Roberts  Bros.,  for  cash,  200  bu.  rje  at  6of  per  bu.; 
total,  $120. 


No.  25. — February  26. 
account. 


W.  A.  Scott  has  paid  you  $72  cash  in  full  settlement  of  his 


Instructions. — In  transaction  No.  18  W.  A.  Scott  became  indebted  to  }ou  to  the 
extent  of  $72.  He  now  pays  this  amount,  thus  getting  out  of  your  debt.  He  has 
produced  value  to  the  business  to  the  amount  of  $72  by  giving  you  cash,  hence  Cash 
should  be  debited  and  W.  A.  ^rc// credited.  The  following  illustrates  the  form  of  your 
entry,  though  the  amounts  are  different. 


(^ 


-^'^S^-e^^r&r^.JLz^L^c^ 


z6 


(^Z-C-oA-^ 


4</'<^ 


,/' . 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


25 


R^ile  11. —  Whenever  a  person  pays yoic  on  account,  credit  that  Person. 

No.  2(>. — February  26.     Received  cash  of  J.  S.  Sumner,  $100,  to  applj'^  on  account. 

Instructions. — This  transaction  is  similar  to  the  preceding  one,  with  the  exception 
that  the  explanation  should  read  To  apply  on  account  instead  of  In  full  of  account. 

Xo.  27. — February  27.  Paid  A.  J.  I^ane  cash,  $82.50,  in  settlement  of  his  account 
to  date. 

Instructions. — In  transaction  No.  15  you  became  indebted  to  A.  J.  L,ane  to  the 
amount  of  $82.50.  You  now  get  out  of  his  debt  by  paying  him  in  cash;  thus  A.  J.  Lane 
costs  the  business  value,  hence  A.  f.  Lane  should  be  debited;  cash  has  been  disposed  of, 
hence  Cash  should  be  credited. 

The  following  illustrates  the  form  of  your  entry,  though  the  amounts  are  different. 


/Ty^y)^r<:::yC^ 


2-: 


>^^2^ 


a^-€.^f>!^--~^ 


/ 


(p 


/ 


•^ 


Rule  \'2i.-— Whenever  you  pay  a  person  on  account,  debit  that  Person. 

^o.  28. — February  28.     Paid  W.  H.  Stevens  cash,  $100,  to  apph^  on  account. 

Instructions. — Make  entry  similar  to  preceding  transaction,  with  exception  that  the 
explanation  should  read  To  apply  on  account  instead  of  /;/  full  of  account. 

No.  29. — February  28.  Received  cash  of  E.  H.  French  &  Co.,  $342,  inpayment  of 
bill  of  19th  inst.      (Entry  similar  to  transaction  No.  25.) 

No.  30. — February  28.  Sold  Emerson  &  Sons,  on  account,  100  bu.  corn  at  40^/  per 
bu.,  60  brls.  flour  at  $4.50  per  brl.,  100  bu.  oats  at  35^'  per  bu.;  total,  $345.  (Determine 
the  debit  by  rule  10;  determine  the  credit  by  rule  8.) 

No.  31. — February  28.  Paid  for  postage  and  advertising  $12,  cash.  (Determine  the 
debit  by  rule  5;  determine  the  credit  by  rule  6.) 

No.  32. — Open  the  following  new  accounts  in  your  ledger,  leaving  space  as  indicated. 

W.  A.  Scott,  nth  line,  page  4.  S.  A.  Dodge  &  Co.,  22d  line,  page  4.  J.  S.  Sumner, 
33d  line,  page  4.  E.  H.  French  &  Co.,  top  of  page  5.  Emerson  &  Sons,  nth  line,  page 
5.  A.  J.  Lane,  nth  line,  page  7.  W.  H.  Stevens,  22d  line,  page  7.  F.  A.  Smith  &  Co., 
33d  line,  page  7.     Rice,  Miller  &  Co.,  top  of  page  8. 

No.  33. — Post  the  entries  from  your  journal-daybook  to  your  ledger,  according  to 
instructions  given  on  page  13.  Do  not  open  new  accounts  in  your  ledger  with  Cash, 
Merchandise,  and  Expense,  but  post  the  items  under  the  old  accounts,  as  this  is  simply  a 
continuation  of  your  business. 

The  following  illustrates  the  form  of  a  Merchandise  account,  showing  how  it  should 
appear  in  the  ledger  with  the  pencil  footings  for  the  first  trial  balance.  (This  is  not 
your  Merchandise  account). 


26 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


T" 


/ 
z 
z 

3 


/  6  £P  {? 


.^Jr 


/  z 
z^ 


/ 
z 

z 

.3 


6  s'lP 

3  Z3- 

2.    f/v  a 

^Z£^ 


DIRECTIONS  FOR  CHECKING   FROM   JOURNAL  TO   LEDGER. 

In  order  to  avoid  mistakes  in  posting,  many  bookkeepers  check  every  item  from  the 
journal  to  the  ledger  after  it  has  been  posted.  As  you  have  completed  the  posting  for 
the  month  of  February,  you  may  check  your  entire  journal  to  j'our  ledger.  On  page  i 
of  your  journal  you  find  the  item  Cash,  Dr.,  $2500.  Put  a  small  check  mark  opposite 
the  $2500,  as  shown  in  the  following  form. 


^^^^^^-^^^^  /,  /^^ 


/^c 


— 

7^^^^^^ 

~t^3'^'r?^?^-^2<?'Z-,^'^?-Z'iC^g'?2^_-'^^5C^ 

/ 
■33-0  0 

<^.  >'^^rP~~4^^^f-:n^-aA^ 

^^6?  £? 

^■^>!PZ^<d-i^Z^ 

Turn  to  the  Cash  account  in  your  ledger;  the  $2300  should  appear  as  the  first  entry 
on  the  debit  side  of  the  Cash  account.  If  you  find  it  there,  place  a  small  check  mark 
opposite  the  $2500,  as  shown  in  the  following  form. 


^^■f'2^. 


/  H, 


J  3'':'  c? 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


27 


Check  all  your  debits  first.  See  that  each  debit  item  in  the  journal  has  been  carried 
to  the  debit  side  of  the  account  named  in  the  ledger,  and  place  a  check  mark  against  each 
account  both  in  the  journal  and  in  the  ledger.  Check  the  credit  items  in  the  same  manner. 
If  any  posting  tias  been  omitted,  you  will  discover  it  in  the  checking;  or  if  any  item 
has  been  posted  twice,  or  to  the  wrong  side  of  an  account,  it  will  appear  unchecked  and 
will  thus  be  detected.  This  process  of  checking  requires  a  little  extra  time,  but  it  prevents 
many  errors  in  trial  balances,  and  the  student  will  find  it  a  profitable  exercise. 

A  hard,  sharp-pointed  pencil  should  be  used  for  checking  and  for  pencil  footings  in 
the  ledger.     Make  your  figures  and  check  marks  light. 

No.  34. — Foot  3^our  ledger  in  light  lead-pencil  figures,  as  explained  on  page  19,  and 
take  off  a  trial  balance,  as  explained  on  page  18.  Your  trial  balance  must  show  the  foot- 
ings of  each  account  in  your  ledger.  When  accounts  balance  they  should  be  omitted  from 
the  trial  balance. 

Xo.  35. — Submit  your  journal-daybook,  ledger  and  trial  balance  to  your  teacher  for 
examination  and  approval. 


CONTINUATION   OF   FEBRUARY  BUSINESS. 

To  BE  Entered  in  the  Journal-Daybook. 

No.  30. — March  i.  Bought  of  H.  S.  Clough  &  Co.  on  account,  10  days,  200  brls. 
flour  at  $4.05  per  brl.,  1000  bu.  oats  at  30/'  per  bu.;  total,  $1110.  (Entry  similar  to 
transaction  No.  15,  page  23.) 

No.  37. — March  2.  Sold  Wm.  Archer  &  Co.  on  account,  30  days,  500  bu.  oats  at 
38^/  per  bu.,  50  bu.  rye  at  60/  per  bu.;  total,  $220.  (Entry  similar  to  transaction  No. 
18,  page  23.) 

No.  38. — March  3.  Paid  Rice,  Miller  &  Co.  cash,  $352.50,  in  payment  of  invoice  of 
February  23d.      (Entry  similar  to  transaction  No.  27,  page  25.) 

No.  30. — March  3.  Received  cash  of  Emerson  &  Sons,  to  apply  on  account,  $250. 
(Entry  similar  to  transaction  No.  26,  page  25.) 

No.  40. — March  5.  Paid  H.  S.  Clough  &  Co.  cash,  on  account,  $500.  (Determine 
the  debit  by  rule  12;  determine  the  credit  by  rule  6.) 

No.  41. — March  6.  Bought  of  Kiddei  &  Hill  on  account,  60  days,  1000  bu.  corn  at 
34^/  per  bu.;  total,  $340.     (Determine  the  debit  by  rule  7;  determine  the  credit  by  rule  9.) 

No.  42. — March  7.     Paid  cash  for  freight  and  drayage  to  date,  $15. 
.  Instructions. — Cash  paid  for  freight,  cartage,  drayage,  etc.,  is  a  part  of  the  cost  of 
your  merchandise,  hence  Merchandise  should  be  debited  and  Cash  credited.    The  following 
illustrates  the  form  of  your  entry,  though  the  amounts  are  different. 


/. 


-^  ^L^J^Jz^ 


'C^^CiZ-Z^^ 


Z2. 


^t^ 


Z2 


^a 


28 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Rule  13. — Debit  Merchandise  for  all  amounts  paid  for  freight,  express,  cartage, 
drayage,  etc. 

%  No.  43. — March  8.  Sold  E.  H.  French  &  Co.  on  account,  lo  days,  300  bu.  corn  at 
40^  per  bu.,  400  bu.  oats  at  38^/  per  bu.;  total,  $272.  (Determine  the  debit  by  rule  10; 
determine  the  credit  by  rule  8.) 

Xo.  44. — March  9.    You  have  withdrawn  from  the  business,  for  private  use,  cash,  $25. 

Instructions. — As  the  Proprietor  is  credited  with  money,  property,  etc.,  which  he 
invests  in  the  business,  it  is  evident  that  he  should  be  debited  for  anything  which  he 
takes  out  of  the  business.  In  this  instance  he  has  withdrawn  cash,  hence  the  Proprietor 
should  be  debited  and  Cash  credited  for  $25.  The  following  illustrates  the  form  of  j-ovur 
entry,  though  the  amounts  are  different. 


Proprietor 


v/"^ 


.jTd^ 


Use  your  own  name  in  making  the  above  entry. 

Rule  14. — Debit  the  Proprietor  for  all  cash,  merchandise,  etc.,  which  he  takes  out  of 
the  business. 

Xo.  45. — March  10.  Bought  of  Kidder  &  Hill  on  account,  30  days,  1000  bu.  corn 
at  36'/  per  bu.,  200  bu.  rye  at  ^a^'I  per  bu.;  total,  $468. 

No.  4(i. — March  ii.     Paid  H.  S.  Clough  &  Co.  cash,  $100,  to  apply  on  account. 

No.  47. — March  12.  Sold  F.  W.  Garland,  on  his  note  at  10  davs,  50  brls.  flour  at 
$4.60  per  brl.;  total,  $230. 

The  following  illustrates  the  form  of  the  note  which  F.  W.  Garland  gives  you,  the 
amount  being  different. 


^<^^.^^ 


f^y^Ad'j.yW     "^^^y. 


'^./z      y/.90 


'^^^/i^^  ---^gt^^^cg^.^-.^^ 


;^.m^/y7^^<e^/Y^  -^g:^^^-^.rg^,^-i^-y^ 


^:riiz^ya/^et^yf:^<z^c^i.JL-.^^w^^ 


y^f^-^<:i^<Z'p^-. 


^^./^^;r^--^--.^^^^<^?-.^.-g^-vV;?^^^---^ 


UU^Z^/^yO'^ 


K' 


^^^^g^-^v 


~^.y<^oca^i:.^y 


//. 


V  ^"7^^^^^^^ 


Instructions. — You  have  sold  merchandise,  and  F.  W.  Garland  has  given  }ou  his 
written  promise  to  pay  in  30  days  the  amount  of  the  bill.     A  written  promise  to  pay  is 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


29 


called  a  note.    When  these  notes,  or  promises,  are  in  favor  of  the  business,  they  are  called 

"Bills  Receivable,"  and,  like  any  other  property,  they  are  debited  when  received  and 

credited  when  disposed  of;  hence  in  this  instance  Bills  Receivable  should  be  debited  and 

Merchandise  credited.     The  following  illustrates  the  form  of  your  entry,  though  the 

amounts  and  explanation  are  different. 


/  z 


^d^-C^, 


/    '   '-—^   ^  1 


<J^ 


/  (7 1^ 


/  ^^ 


Rule  15. — Debit  Bills  Receivable  for  all  notes  (^written  promises  to  pay')  that  you 
receive  which  are  sig7ied  by  other  persons. 

Xo.  48. — March  13.  Sold  Wm.  Archer  &  Co.,  on  their  note  at  15  days,  150  brls. 
flour  at  $4.60  per  brl.;  total,  $690.      (Entry  similar  to  previous  transaction.) 

Xo.  40. — March  14.  S.  A.  Dodge  &  Co.,  who  owe  you  $237.50,  have  requested 
you  to  accept  their  note  at  30  days  in  payment  of  the  account.     This  you  have  agreed  to  do. 

Instructions. — In  this  instance  you  have  received  S.  A.  Dodge  &  Co.'s  written 
promise  to  pay,  hence  Bills  Receivable  should  be  debited  (see  rule  15).  As  S.  A.  Dodge 
&  Co.  have  paid  you  on  account,  6*.  A.  Dodge  &  Co.  should  be  credited.  The  following 
illustrates  the  form  of  your  entry,  though  the  amounts  and  explanation  are  different. 


^/ 


^ 


^7' 


Xo.  50. — March  15.    J.  S.  Sumner  sends  you  his  note  at  10  days  to  apply  on  account, 

$250.      (Entry  similar  to  preceding  transaction.) 

Xo.  51. — March  16.  Sold  S.  A.  Dodge  &  Co.,  on  account,  600  bu.  corn  at  40'/'  per 
bu.,  50  brls.  flour  at  $4.50  per  brl.;   total,  $465. 

Xo.  52. — March  17.  Bought  of  H.  S.  Clough  &  Co.,  on  account,  100  brls.  flour  at 
$4  per  brl.,  500  bu.  corn  at  35^/  per  bu.;  total,  $575. 

Xo.  53. — March  18.  Sold  J.  B.  Fulton,  on  his  note  at  two  months,  400  bu.  oats  at 
38^  per  bu.,  200  bu.  corn  at  40'/  per  bu.;  total,  $232.  (Entry  similar  to  transaction 
No.  48.) 

Xo.  54. — March  19.  Bought  of  Kidder  &  Hill,  on  your  note  at  10  days,  200  brls. 
flour  at  $4  per  brl.,  500  bu.  corn  at  355^'  per  bu.;  total,  $975. 


80 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


The  following  is  the  form  of  the  note  which  you  will  give  Kidder  &  Hill.      The 
amount  is  different. 


JS.'*r^'A.r^-t^'qg^''fr>^-?«^'t^.aL.'<fc^^^^'<<^-3^''*-?'*^<i^A'd^7*fr^Jf-v"^-.'A^<S^'^I^.^^^ 


^S^ 


.^^^->^^^^ 


V-V^St^^?-^---^^?^^^-/--^ 


-^^ 


V-9o^ 


^^-}^Jt^k^mi^^/^y/um//i^ 


^-?-?^-^- 


--Q:^^^^^^-^^::^^^-^^-^^ 


^^^-^'-^^g^^^g^^-^-^e- 


g  CF  Morns  S!iiljDivr.rii](hisrer,.\l  ; 


Instructions. — You  have  bought  merchandise  and  have  given  Kidder  &  Hill  your 
note  or  written  promise  to  pay  the  amount  of  the  bill  in  lo  days.  Written  promises  to 
pay,  given  by  you  for  the  benefit  of  the  business,  are  called  "  Bills  Paj^able,"  and,  like 
any  other  property,  they  should  be  credited  when  issued  or  disposed  of,  and  debited  when 
paid  or  received;  hence  Merchandise  should  be  debited  and  Bills  Payable  credited  for 
the  amount  of  the  note.  The  following  illustrates  the  form  of  your  entry,  though  the 
amounts  and  explanation  are  different. 


(^l^ . 


6 


C  £> 


6  c  c>-'V^-t^i^r'(Oyt:^^i'^^^z^       ^^A' 


Rule  16. — Credit  Bills  Payable  for  all  7iotes  {written  promises  to  pay)  which  are 
sighted  by  the  Proprietor,  and  given  for  the  bcneft  of  the  business. 

No.  55. — March  20.  Bought  of  Warner  &  Freeman,  on  your  note  at  10  da3^s,  600 
bu.  corn  at  35^/  per  bu.;  total,  $210.      (Entry  similar  to  previous  transaction.) 

N<).  50. — March  21.  Sold  A.  H.  Warren,  on  his  note  at  30  days,  50  brls.  flour  at 
$4.60  per  brl.,  190  bu.  corn  at  40/'  per  bu.;  total,  $306.  (Entrj^  similar  to  transaction 
No.  48.) 

No.  57. — March  22.  Sold  Weston  &  Hill,  on  account,  25  brls.  flour  at  $4.60  per 
brl.,  380  bu.  corn  at  40^'  per  bu.;   total,  $267. 

No.  58. — March  23.  Bought  of  Chas.  A.  Hill  &  Co.,  on  your  note  at  60  days,  1000 
bu.  oats  at  33;^'  per  bu.,  500  bu.  corn  at  35'/  per  bu.;  total,  $505.  (Entry  similar  to 
transaction  No.  55.) 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


31 


No.  59. — March  23.  Sold.  Roberts  Bros.,  on  account,  15  days,  50  brls.  flour  at  $4.50 
per  brl.;  total,  $225. 

No.  60. — March  23.     F.  W.  Garland  has  paid,  you  his  note  of  12th  inst.  in  cash,  $230. 

Instructici^S. — You  have  received  cash  and  disposed  of  the  note,  which  should  be 
returned  to  F.  W.  Garland.  As  Bills  Receivable  was  debited  when  the  note  was  received, 
it  is  evident  that  Bills  Receivable  should  be  credited  when  the  note  is  disposed  of. 
The  following  illustrates  the  form  of  your  entry,  though  the  amounts  and  explanation 
are  different. 

Z<9 


^y^h:LJ^ 


-S-'i^",        .'-i.^-y^z^.-^^ih^Z'^z^^f-T-t^y'-^^'^^-^^ 


A^6 


^ 


^& 


tp 


Rule  1 7. — Credit  Bills  Receivable  when  notes  signed  by  other  persons  are  disposed  of . 

No.  61. — March  24.  J.  S.  Sumner  has  paid  his  note,  due  this  day,  in  cash,  $250. 
(Entry  similar  to  previous  transaction.) 

No.  62. — March  24,  You  have  paid  your  note  of  19th  inst.,  favor  of  Kidder  &  Hill, 
in  cash,  $975. 

Instructions. — You  have  disposed  of  cash  and  received  therefor  your  note.  As  Bills 
Payable  was  credited  when  your  note  was  issued,  it  is  evident  that  Bills  Payable  should 
be  debited  when  your  note  is  paid  or  redeemed.  The  following  illustrates  the  form  of 
your  entry,  though  the  amounts  and  explanation  are  different. 


2-f 


6<rj" 


(^r^ 


Rule  18. — Debit  Bills  Pa  table  for  all  notes  (written  promises  to  pay)  which  are  paid 
by  the  business. 

No.  63. — March  24.  You  have  paid  your  note,  favor  of  Warner  &  Freeman,  in 
cash,  $210.      (Entry  similar  to  previous  transaction.) 

No.  64. — March  25.  Received  of  E.  H.  French  &  Co.,  to  apply  on  account,  their 
note  at  30  days  for  $200. 

No.  65. — March  25.  Transfer,  by  indorsement,  A.  H.  Warren's  note  of  21st  inst. 
for  $306  to  H.  S.  Clough  &  Co.,  to  apply  on  account. 

Instructions. — Instead  of  keeping  A.  H.  Warren's  note  (bills  receivable)  until  it 
becomes  due,  and  collecting  the  money  yourself,  you  have  given  the  note  to  H.  S.  Clough 
&  Co.  to  apply  on  account,  and  they  agree  to  accept  it  at  its  face  value.  You  have  paid 
Clough  &  Co.  on  account,  therefore  they  should  be  debited  (see  rule  12);  5'ou  have  dis- 
posed of  a  note  in  favor  of  the  business,  hence  Bills  Receivable  should  be  credited  (see 
rule  17).  The  following  ill-ustrates  the  form  of  entry,  though  the  amounts  and  expla- 
nation are  different. 


32 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


3  <?  (P 


S  C  c^ 


Indorsing  a  note  consists  in  writing  your  name  on  the  back  of  the  note,  about  one 
and  one-half  inches  from  the  upper  end.  The  effect  of  an  indorsement  is  to  make  the 
person  who  writes  his  name  on  the  back  of  a  note  responsible  for  its  payment  in  case  the 
maker  fails  to  pay  the  note  when  it  is  due.  If  the  note  is  payable  to  order,  the  indorse- 
ment is  also  necessary  for  the  purpose  of  transferring  the  title. 

The  following  is  a  form  of  indorsement  commonly  used  in  transferring  notes  like  that 
referred  to  in  transaction  No.  65. 


No.  0(>. — March  26.  Paid  clerk  hire,  $15,  stamps,  etc.,  $2;  total,  $17.  (Entry 
similar  to  transaction  No.  31.) 

No.  07. — March  27.  Gave  Kidder  &  Hill  3-our  note  at  30  da3\s,  for  $340,  to  apply 
on  account. 

No.  08. — March  27.  William  Archer  &  Co.  paid  their  note  of  the  13th  inst.  in  ca^li. 
$690. 

No.  Ol). — March  28.  The  freight  and  drayage  bills  to  date  are  $12;  the}'  have  been 
paid  in  cash.     (Entry  similar  to  transaction  No.  42.) 

No.  70. — March  28.  You  have  taken  from  the  store,  for  use  in  }our  family,  2  brls. 
flour  at  $4  per  brl.;  total,  $8. 

Instructions. — You  (the  proprietor)  have  taken  from  the  business,  for  3-our  own 
private  use,  merchandise  valued  at  $8.  The  Proprietor  shonld  lie  debited  for  the  withdrawal 
from  the  business,  and  Merchandise  should  be  credited,  as  it  has  been  sold  to  the  proprietor. 

No.  71. — March  29.  Bought  of  A.  J.  Eanc,  on  account,  600  bu.  oats  at  32'/  per  bu., 
200  bu.  r3'e  at  55^'  per  bu.;   total,  $302. 

No.  72. — March  29.     Paid  F.  A.  Smith  &  Co.  cash,  $165,  in  full  of  account  to  date. 
No.  l',\. — March  29.     Received  of  Wni.  Archer  &  Co.  cash,  on  account,  $150. 
No.  74. — March  30.     Bought  of  Rice,  Miller  &  Co.  on  account,  30  days,  50  brls.  flour 
at  $3.95  per  brl.,  400  Im.  corn  at  35/-  per  bu.;   total,  $337.50. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


33 


Wm.  Archer  & 

,  top  of  page  6. 

Kidder  &  Hill, 


No.  75. — March  30.  Sold  W.  A.  Scott  on  account,  30  days,  400  bu.  oats  at  38'/  per 
bu.,  50  brls.  flour  at  $4.50  per  brl.;  total,  $377. 

No.  7<>. — March  31.  Bought  of  F.  A.  Smith  &  Co.  on  account,  30  days,  75  brls. 
flour  at  $4.  per  brl.;  total,  $300. 

No.  77. — Open  the  following  accounts,  leaving  space  as  indicated. 

lyoss  and  Gain,  nth  line,  page  2.     Bills  Receivable,  top  of  page  4. 
^o.,  22d  line,  page  5.     Weston  &  Hill,  33d  line,  page  5.     Roberts  Bros. 
Bills  Payable,  top  of  page  7.     H.  S.  Clough  &  Co.,  nth  line,  page  8. 
2 2d  line,  page  8. 

Post  from  your  journal,  following  directions  for  posting  on  page  13.  Take  a  trial 
balance  (see  instructions  below),  and  present  your  journal,  ledger  and  trial  balance  to 
your  teacher  for  approval. 

In  taking  the  trial  balance,  March  31st,  you  may  write  only  the  difference  between 
the  two  sides  of  each  account  in  the  money  columns  of  the  trial  balance.  Pencil  foot 
your  ledger  accounts  as  usual.  On  the  larger  side  of  the  ledger  account,  in  the  explana- 
tion space,  near  the  top  of  the  account,  write  the  pencil  footing  of  that  side  of  the  account; 
underneath  it  write  the  pencil  footing  of  the  smaller  side;  subtract,  writing  the  remainder 
underneath,  and  leave  these  pencil  figures  in  your  ledger.  Carry  this  remainder  only  into 
the  trial  balance  opposite  the  name  of  the  account,  and  on  the  larger  side.  Use  a  hard, 
sharp-pointed  pencil  and  make  your  figures  small  like  all  pencil  footings.  (See  Cash  and 
Merchandise  accounts  in  model  ledger,  page  8,  to  show  the  method  of  finding  the  differ- 
ence between  the  sides  of  accounts  to  be  used  in  this  form  of  trial  balance.) 

The  following  is  a  trial  balance  taken  in  this  manner  from  the  model  ledger  on  pages 
S  and  9. 


r  ^  J^y^^- 


23  /  6> 


2-  /  iP 


^  &  Z 


oT^ 


J-^ 


^i'A^^- 


2.a.J~  £^ 


f^Zi? 


^ 


Com. — 3 


34  MODERN    ILLUSTRATIVE    BOOKKEEPING, 

DIRECTIONS  FOR  FINDING   MISTAKES  IN  TRIAL  BALANCES. 

The.  debit  and  credit  columns  of  your  journal  are  equal.  If  the  items  are  posted  cor- 
rectly, it  is  evident  that  the  debit  and  credit  sides  of  your  ledger  will  also  be  equal.  The 
debit  and  credit  money  columns  of  your  trial  balance  should  be  equal,  as  the  trial  balance  is 
made  up  of  the  differences  between  the  debit  and  credit  money  columns  of  your  ledger; 
but  every  bookkeeper  finds  from  practical  experience  that  errors  occur,  and  it  is  by  no 
means  uncommon  to  find  a  difference  between  the  debit  and  credit  money  columns  of  the 
trial  balance  when  it  has  been  taken  off  from  the  ledger. 

If  3^ou  have  checked  the  items  from  the  journal  to  the  ledger,  as  directed  on  page  26, 
any  mistakes  in  posting  should  be  discovered,  but  many  bookkeepers  do  not  check,  using 
every  other  means  of  finding  mistakes  before  resorting  to  this  expedient;  for,  in  a  large 
business,  it  is  a  considerable  addition  to  the  work  of  the  bookkeeper  if  he  is  obliged  to 
check  all  postings  a  second  time. 

The  following  directions  will,  it  is  believed,  enable  you  to  detect  most  mistakes. 

1 .  Verify  your  additions,  both  in  the  trial  balance  itself  and  in  each  account  in  the 
ledger. 

2.  See  that  the  subtraction  has  been  correctly  performed  in  finding  the  differences 
between  the  sides  of  the  ledger  accounts. 

3.  Find  the  exact  amount  of  the  difference  between  the  two  sides  of  the  trial  balance. 
Look  through  your  journal  and  see  if  any  such  amount  appears  in  either  column  of  the 
journal.  If  you  find  the  amount,  it  has  very  probably  been  omitted  in  the  posting  and 
will  rectify  the  error. 

4.  L,ook  in  the  journal  for  an  amount  equalling  half  the  difference  between  the  two 
sides  of  the  trial  balance.  A  debit  amount  of  half  the  difference  posted  to  the  credit  side. 
or  a  credit  amount  posted  to  the  debit  side  of  the  ledger  would  give  the  amount  of  the 
difference. 

5.  See  if  the  difference  between  the  sides  of  the  trial  balance  is  divisible  by  9;  if  so,  it 
is  probable  that  figures  have  been  transposed  in  posting,  e.  g.,  39  posted  as  93.  There  is 
no  method  of  locating  such  an  error  except  by  checking. 

Finally,  if  the  error  is  not  discovered  by  any  of  these  methods,  it  is  necessary  to  check 
from  the  journal  to  the  ledger.  In  doing  this  work  be  sure  that  you  check  in  both  books. 
If  this  is  carefully  done  errors  must  be  detected. 


STATEMENT. 

In  addition  to  keeping  accounts,  the  bookkeeper  must  be  able  to  show  at  any  time 
whether  the  business  is  profitable  or  unprofitable,  and  from  what  sources  (accounts)  the 
gains  and  losses  arise.  This  is  usually  done  at  stated  periods — generally  yearly — by 
making  a  statement  which  shows  in  detail  just  what  property  or  resources  the  business 
has  on  hand,  what  debts  or  liabilities  it  has  outstanding,  what  gains  it  has  made,  and 
what  losses  it  has  sustained.  From  this.material  it  is  easy  to  show  the  present  staiiding 
or  worth  of  the  business,  and  determine  whether  it  is  prosperous  or  unprosperous,  as  well 
as  to  indicate  the  sources  from  which  the  gains  arise  or  the  losses  occur. 

The  first  step  in  making  out  a  statement  is  to  take  an  inventory  of  the  property  on  hand. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


35 


INVENTORY. 

An  inventory  is  a  list  of  unsold  merchandise  and  other  property  on  hand  at  the  time 
the  statement  is  rendered.  Since  Merchandise  is  debited  when  bought,  and  credited  when 
sold,  it  is  evident  that  the  value  of  unsold  merchandise  must  be  ascertained  before  it  can 
be  determined  whether  there  has  been  a  gain  or  a  loss.  A  complete  list  of  every  article 
of  merchandise  is  taken  and  kept  in  a  book  or  on  sheets,  with  the  value  indicated.  The 
cost  price  of  merchandise  is  generally  assumed  to  be  the  value  of  the  goods  unless  there 
has  been  a  decided  rise  or  fall  in  the  market  price  since  the  articles  were  purchased.  By 
comparing  the  purchases  and  sales  in  your  journal,  it  is  found  that  you  should  have  on 
hand  the  following. 


2830  bu.  Corn, 
1250    "    Oats, 
400    "    Rye, 
213  brls.  Flour, 


Inventory,   Mar.  31,   19- 


35^', 

990.50 

309^-, 

375- 

55^/', 

220. 

3  -90, 

830.70 

2416.20 


CLASSES  OF  ACCOUNTS. 

Every  business  will  contain  two  classes  of  accounts,  which  may  be  called  Accounts  of 
Business  and  Accounts  of  Finance. 

Accounts  of  Business  are  those  accounts  which  indicate  a  gain  or  a  loss  to  the  business, 
such  as  Merchandise,  Expense,  Interest,  Discount,  Real  Estate,  and  other  accounts  of  a 
similar  nature.  The  chief  business  account  of  any  business  will  be  Merchandise,  for  it  is 
from  the  buying  and  selling  of  goods  that  the  principal  profit  is  derived.  All  accounts  of 
business  are  placed  together  on  a  statement  known  as  a  statement  of  losses  and  gains. 
The  following  is  the  form  of  such  a  statement. 


-^^^^i^S^^^^^^^^-^c^-^'^^^^z^c;^^^^^:;^^^/  ]^<^^^-gZ^^^^2^,  ^//^^^^l^. 


yj/,  /f^- 


9^.^^, 


^^oc. 


36<^Z. 


5-S2'^^<*2-' 


Losses. 


y Z-&  ^ra 


^^  / 


^oT/" 


^c 


Gains. 


OTX'./' 


■j'~j'<r- 


36  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

HOW  TO   MAKE  OUT  A  STATEMENT  OF   LOSSES  AND  GAINS. 

Take  a  sheet  of  journal  paper  and  write  at  the  top  thereof,  Statement  of  Losses  and 
Gains,  March  ji,  ig — .  All  losses  are  placed  in  the  left-hand  or  debit  column  of  the 
statement,  and  all  gains  are  placed  in  the  right-hand  or  credit  column. 

1.  Take  the  amount  of  merchandise  which  you  have  on  hand,  as  shown  by  3'our 
inventory,  $2416.20,  and  place  it  after  Merchandise,  value  of  iinsold,  writing  it  short,  as 
shown  in  model,  page  35. 

2.  The  excess  of  the  debit  over  the  credit  side  of  your  Merchandise  account,  as  shown 
by  your  trial  balance,  is  $1736.50.  Take  this  amount  and  place  it  after  Merchandise, 
excess  of  cost  over  sales,  writing  it  short,  as  shown  in  model. 

3.  It  is  evident,  from  the  above,  that  you  have  paid  out  $1736.50  more  than  you  have 
received  for  merchandise,  and  if  you  had  no  goods  on  hand  your  loss  would  be  $1736.50; 
but  it  is  estimated  that  the  goods  you  have  on  hand  are  worth  $2416.20,  and  could  be 
sold  for  this  amount,  so  in  reality  you  have  a  profit  of  $679.70  ($2416.20  -$1736.50= 
$679.70).      Write  your  profit  in  the  Gain  column  after  Merchandise  Gain.     (See  model.) 

4.  The  debit  side  of  your  Expense  account  is  $104  greater  than  the  credit  side,  so  it 
is  evident  that  there  has  been  a  loss  on  expense  of  $104.  Place  this  amount  after  Expense 
in  the  Loss  column. 

5.  Foot  5^otir  Loss  and  Gain  columns.  The  footing  of  your  Gain  column  is  $679.70, 
and  the  footing  of  your  Loss  column  is  $104;  the  difference  between  the  footings  is 
$575.70.  As  the  Gain  column  is  the  greater,  it  is  evident  that  the  business  has  made  a 
profit  of  $575.70.  Write  this  amount  after  the  words  Net  Gain,  in  red  ink,  in  the  Loss 
column.  Now  foot  your  Gain  and  Loss  columns,  and  write  the  footings  as  shown  in 
model.  Wlien  an  amount  is  written  in  red  ink,  it  indicates  the  difference  between  two 
columns,  or  between  two  sides  of  an  account.  Red  ink  entries  are  always  placed  on  the 
smaller  side,  and  show  that  the  opposite  side  or  column  is  greater  than  the  column  con- 
taining the  red  ink  entry  by  the  amount  of  such  entry. 


ACCOUNTS  OF  FINANCE. 

The  second  class  of  accounts  in  your  trial  balance  may  be  called  Accounts  of  Finance, 
since  they  represent  monej'  value  or  money  indebtedness  to  the  business.  They  comprise 
the  resources  or  property  of  the  business,  and  its  liabilities  or  debts,  and  include  such 
accounts  as  Cash,  Bills  Receivable,  Merchandise  (property  on  hand),  Bills  Payable, 
accounts  with  persons,  etc.  The  difference  between  the  resources  or  property  of  any 
business  and  its  liabilities  or  debts  will  show  the  present  worth  of  that  business,  and  the 
Proprietor  should  have  credit  for  this  amount.  To  ascertain  the  present  worth  of: 
the  business,  you  should  make  otit  a  statement  of  resources  and  liabilities.  The  following 
is  the  form  of  such  a  statement. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


37 


z-?^ 


K 


'J/,  /^^.- 


'f. 


€k^^.^. 

^«Z-<^_^;J^,i^^    ^--^J'^-^^'Tt^^Z-ijW^ 

Resources. 

LlAHILITIES. 

'^.'^^-^A^ 

-.--^^^?*^-^^*^'#2,^,^-*»:?2-^— yZ--2Z-^?Z-S7 

/(r2^  JO 

■:XX->^'I-Z>d.fS<i'^^?^^2e<7-z-^ 

— ^^Z^-<^«^?2-^Ui-^.^-SZ^' •'^ 

ZaCj-^ 

/■'                                   /» 

/ 

4<0 

/ 

^                                    # 

fZifJO 

C- 

'^J^^</f/^^P^^^:^c^ 

^                                      -^ 

^J^J"/a 

^2.^^-:^, 

/':?2,-e»^^  ^if'^^z^  ,-<#C«&-?z-«7^ 

/4^J 

=x^,  ^:7r^?T^<sz^^z^  ^''i^^tjr 

,.-z^^^^^.^^A.^.^^ 

/Z^  i? 

■^^^i<£^«C«?z:^^^:^Z<r:?X^^^^Z^4i^?2^  V^^.--CK 

/f             " 

/f(^S 

y 

^.^<^^Q^L.-£>^  y^^ 

/'                                      -c 

4^Z 

u 

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?s 

^/P/  Z 

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i 

HOW  TO   MAKE  OUT  A  STATEMENT  OF   RESOURCES  AND   LIABILITIES. 

Take  a  sheet  of  journal  paper  and  write  at  the  top  thereof,  Statement  of  Resources  and 
Liabilities,  Mar.  ji,  ip — .  Write  on  the  statement  the  names  of  all  accounts  in  your 
ledger,  except  3our  own,  Expense,  and  lyoss  and  Gain,  as  shown  in  the  above  model,  but 
do  not  put  any  figures  in  the  amount  columns.  The  left-hand  or  debit  column  of  your 
statement  is  used  for  j^our  resources;  the  right-hand  or  credit  column  is  used  for  your 
liabilities. 

1.  Take  the  amount  of  merchandise  you  have  on  hand,  as  shown  by  your  inventory 
($2416.20),  and  place  it  after  M erch acidise ,  in  the  Resource  column. 

2.  The  debit  side  of  your  Cash  account,  as  shown  by  your  trial  balance,  is  $1145.50 
more  than  the  credit  side.  This  is  a  resource,  and  should  be  written  after  Cash  in  the 
Resource  column. 

3.  The  debit  side  of  the  account  of  W.  A.  Scott,  as  shown  by  your  trial  balance,  is 
$377  more  than  the  credit  side.  This  is  a  resource,  and  should  be  placed  after  W.  A. 
Scott  in  the  Resource  column. 

4.  5.  Treat  the  accounts  of  S.  A.  Dodge  &  Co.,  J.  S.  Sumner,  E.  H.  French  &  Co., 
Emerson  &  Sons,  \Vm.  Archer  &  Co.,  Weston  &  Hill  and  Roberts  Bros,  in  a  similar 
manner. 

6.  The  debit  side  of  j^our  Bills  Receivable  account,  as  shown  hy  your  trial  balance,  is 
$669.50  more  than  the  credit  side.  Place  this  amount  in  your  Resource  column.  In 
making  up  3'our  statement  all  resources  should  be  given  first,  then  the  liabilities. 

7.  By  referring  to  your  trial  balance,  it  is  ascertained  that  the  credit  side  of  your  Bills 
Payable  account  is  $845  more  than  the  debit  side,  hence  you  have  a  liability  of  $845. 
This  amount  should  be  placed  after  Bills  Payable  in  your  Eiability  column. 


38 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


8.  By  referring  to  5"our  trial  balance,  it  is  ascertained  that  the  credit  side  of  the 
account  of  A.  J.  Lane  is  $302  more  than  the  debit  side.  Place  the  amount  after  ^-i./. 
Lane  in  the  lyiability  column. 

9,  10.  Treat  the  accour.ts  of  W.  H.  Stevens,  F.  A.  Smith  &  Co.,  Rice,  Miller  &  Co., 
H.  S.  Clough  &  Co.  and  Kidder  &  Hill  in  a  similar  manner  to  that  of  A.  J.  Lane. 

1 1 .  Find  the  difference  between  your  Resource  and  Liability  columns.  The  difference 
in  the  present  instance  is  $3042.70.  Place  this  amount  in  your  Liability  column,  in  red 
ink,  after  the  words  Present  Worth.  The  difference  between  the  resources  or  property  of 
any  business  and  its  liabilities  or  debts  will  show  the  present  worth  of  that  business. 
In  case  the  liabilities  or  debts  should  exceed  the  resources  or  property,  it  is  evident  that 
there  w^ould  be  no  present  worth,  and  that  the  business  would  be  insolvent;  that  is,  it 
could  not  pay  its  debts  if  called  upon  to  do  so. 

12.  You  will  now  make  out  a  proof  of  j^our  statement  of  resources  and  liabilities.  See 
model  below. 


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The  amount  of  the  Proprietor's  investment  is  taken  from  the  credit  side  of  his  ledger 
account.  In  your  ledger  this  amount  is  $2500.  The  amount  of  his  withdrawals  is  taken 
from  the  debit  side  of  his  ledger  account.  In  your  ledger  this  amount  is  $33.  Subtract 
the  withdrawals  from  the  investment,  which  will  give  you  the  net  investment,  and  in  yowx 
case  the  amount  is  $2467.     Place  this  after  your  name,  as  shown  in  model. 

13.  The  amount  of  your  gain,  as  shown  l)y  your  loss  and  gain  statement,  is  $575.70. 
Place  this  after  Net  Gain. 

14.  Your  net  gain  added  to  your  investment  should  give  the  present  worth  of  the  busi- 
ness, which  is  $3042.70.  This  amount  agrees  with  the  amount  shown  in  the  statement 
of  resources  and  liabilities,  hence  the  statement  is  correct.  If  the  business  shows  a  loss, 
the  amount  of  the  loss  should  be  subtracted  from  the  net  investment  to  find  the  present 
worth. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  39 

QUESTIONS. 

1.  Define  buying  on  account. 

2.  Define  selling  on  account. 

3.  When  are  personal  accounts  credited  ?     When  debited  ? 

4.  What  is  the  object  of  checking  from  the  journal  to  the  ledger  after  posting  ? 

5.  Why  should  the  Merchandise  account  be  debited  for  freight  and  drayage? 

6.  Why  should  the  proprietor  be  debited  for  money  taken  from  the  business? 

7.  Define  a  note. 

8.  Wliat  are  bills  receivable? 

9.  When  should  the  Bills  Receivable  account  be  debited? 

10.  What  are  bills  payable? 

1 1 .  When  should  the  Bills  Payable  account  be  credited  ? 

12.  When  should  the  Bills  Receivable  account  be  credited? 

13.  When  should  the  Bills  Payable  account  be  debited  ? 

14.  Define  indorsement. 

15.  How  does  the  trial  balance  of  March  31st  differ  from  those  previously  taken? 

16.  What  should  the  bookkeeper's  statement  show? 

17.  Define  an  inventory. 

i8.  Why  is  it  necessary  to  take  an  inventory  before  making  a  statement? 

19.  How  is  an  inventory  taken? 

20.  What  price  is  given  the  goods  ? 

21.  Define  accounts  of  business.     Give  examples  of  such  accounts. 

22.  What  information  should  a  statement  of  the  losses  and  gains  contain? 

23.  Define  accounts  of  finance. 

24.  In  what  statement  should  these  accounts  appear? 

26.  How  is  the  present  worth  of  any  business  determined  ? 

25.  Explain  the  method  of  taking  a  proof  of  statement  of  resources  and  liabihties. 


40 


MODERN    ILLUSTRATIVE    liOOKKEEPIXG. 


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42 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


MODEL    LEDGER. 

The  preceding  two  pages  represent  a  model  ledger  properly  closed  and  ruled.  The 
student  should  carefully  examine  the  form  and  ruling. 

HOW  TO  CLOSE  THE   LEDGER. 
Close  your  accounts  of  business  first,  then  your  accounts  of  finance. 

Merchandise. — The  first  account  in  your  ledger  which  shows  a  loss  or  a  gain  is  Mer- 
chandise. The  debit  side  of  this  account  is  $1736.50  more  than  the  credit  side.  This 
indicates  that  you  bought  $1736.50  worth  more  merchandise  than  you  have  sold,  but  you 
still  have  on  hand  (see  inventory,  page  35),  $2416.20  worth  of  merchandise.  It  is  pre- 
sumed that  you  can  sell  this  merchandise  for  its  cost  value,  $2416.20;  if  so.  Merchandise 
should  be  credited  for  this  amount.  Place  your  inventory  on  the  credit  side  of  your  Mer- 
chandise account  in  red  ink.  Write  March  ji  in  the  date  column,  the  word  Inventory  in 
the  explanation  column,  and  $2^16.20  in  the  amount  column.  (See  illustration  below; 
also  see  illustration  in  model  ledger,  page  40. )  The  footing  of  the  credit  side  of  your 
Merchandise  account,  including  the  inventory,  is  now  $8533.20.  The  footing  of  the  debit 
side  is  $7853.50.  As  the  footing  of  the  credit  side  is  the  larger,  it  is  evident  that  there 
has  been  a  gain  of  $679.70  ($8533.20— $7853. 50=$679. 70).  Place  the  amount  of  the 
gain,  in  red  ink,  on  the  debit  side  of  Merchandise  account,  writing  March  ji  in  the  date 
column,  the  word  Gain  in  the  explanation  column,  and  $6'jg.'jo  in  the  amount  column. 
(See  illustration  below;  also  model  ledger,  page  40.)  Foot  your  Merchandise  account, 
rule  it,  and  bring  your  inventory  below  the  ruled  lines  on  the  debit  side. 


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MODERN    ILLUSTRATIVE    BOOKKEEPING. 


43 


WTien  you  commenced  the  closing  process  your  ledger  was  in  balance,  as  shown  by 
the  trial  balance.  A  double  entry  ledger  should  always  be  in  Ijalance;  that  is,  its  debits 
should  always  equal  its  credits.  In  closing  the  Merchandise  account  you  made  a  credit 
entry  of  $2416.20  with  no  corresponding  debit.  By  transferring  this  amount,  in  black 
ink,  to  the  debit  side  of  Merchandise  on  the  first  line  below  the  ruling  under  date  of  April 
I,  you  restore  the  equilibrium  of  the  ledger,  so  far  as  this  entry  is  concerned.  You  also 
show  what  the  merchandise  has  cost  which  3-ou  now  have  on  hand. 

All  red  ink  entries  which  you  make  in  your  ledger  must  be  transferred  to  the  opposite 
side  of  the  account  in  which  they  are  made,  or  to  the  opposite  side  of  some  other  account; 
otherwise  the  ledger  will  be  out  of  balance. 

You  made  an  entry  of  the  gain  ($679.70),  in  red  ink,  on  the  debit  side  of  3'our  ]\Ier- 
chandise  account,  which  of  course  throws  your  ledger  out  of  balance.  Transfer  this 
amount,  in  black  ink,  to  the  credit  side  of  the  Loss  and  Gain  account,  writing  the  page 
of  Merchandise  in  the  folio  column  of  the  L,oss  and  Gain  account  and  the  page  of  Loss 
and  Gain  in  the  folio  column  of  the  INIerchandise  account.      (See  illustration  below.) 


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You  have  now  restored  the  equilibrium  of  the  ledger  and  placed  the  amount  of  your 
gain  from  merchandise  on  the  gain  side  of  the  Loss  and  Gain  account.  All  gains  of  the 
business  are  placed  on  the  credit  side  of  this  (Loss  and  Gain)  account,  and  all  losses  of 
the  business  are  placed  on  the  debit  side.  In  the  space  for  the  explanation  we  write  Mdse. 
for  the  purpose  of  indicating  the  source  from  which  the  gain  was  produced.  The  student 
shovild  examine  model  ledger  on  page  40,  and  trace  the  gain  from  the  Merchandise  account 
to  the  Loss  and  Gain  account. 

Expeuse. — The  debit  side  of  the  Expense  account  is  $104.  As  there  is  nothing  on 
the  credit  side,  it  is  evident  that  expense  has  cost  the  business  $104.  Write  the  amount 
of  the  loss  on  the  credit  side  of  the  Expense  account,  in  red  ink,  and  foot  and  rule  the 
account.      (See  illustration  below.) 


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44 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Transfer  the  loss  ($104)  of  the  Expense  account  to  the  debit  side  of  the  Loss  and 
Gain  account — this  restores  the  equihbrium  of  the  ledger — and  place  the  loss  on  the  loss 
side  of  the  Loss  and  Gain  account. 

The  following  represents  a  Loss  and  Gain  account  as  it  will  appear  after  the  transfers 
have  been  made.     The  figures  in  the  amount  columns  are  different  from  your  figures. 


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Lioss  and  Gain. — Your  Loss  and  Gain  account  now  contains  on  the  debit  side  the 
names  of  all  accounts  that  show  a  loss  to  the  business,  and  on  the  credit  side  the  names 
of  all  accounts  that  show  a  gain.  This  being  the  case,  it  is  evident  that  the  difference 
between  the  sides  of  the  Loss  and  Gain  account  will  show  the  net  gain  or  net  loss  to  the 
business.  As  the  credit  side  of  this  account  is  $575.70  in  excess  of  the  debit  side,  it  is 
evident  that  the  business  has  gained  $575.70.  Place  this  amount  on  the  debit  side  of  the 
Loss  and  Gain  account,  in  red  ink,  writing  the  name  of  the  proprietor  (yourself)  in  the 
explanation  column,  and  foot  and  rule  the  account. 

The  following  represents  a  Loss  and  Gain  account  properly  closed.  The  figures  in 
the  amount  columns  are  different  from  your  figures. 


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Proprietor's  Account. — The  amount  of  the  net  gain  ($575.70),  as  shown  by  tlic  Loss 
and  Gain  account,  should  be  transferred  to  the  acceunt  of  the  Proprietor  (student ) .  Write, 
in  black  ink,  on  the  credit  side  of  the  Proprietor's  account.  Net  Gain,  $575.70. 

The  following  represents  the  Proprietor's  accoiuit  as  it  should  appear  at  I  he  present 
time.     The  figures  in  the  amount  columns  are  different  from  your  figures. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


45 


PROPRIETOk. 


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The  debit  side  of  the  Proprietor's  account  shows  withdrawals  to  the  amount  of  $33; 
the  credit  side  shows  an  investment  of  $2500  and  the  gain,  $575.70,  making  a  total  of 
$3075.70.  It  is  evident  that  the  present  worth  of  the  business  may  be  found  b}^  taking 
the  difference  between  the  sides  of  the  Proprietor's  account.  The  difference  between  the 
sides  is  $3042.70.  Make  an  entry  on  the  debit  side  of  the  Proprietor's  account,  in  red 
ink,  for  this  amount,  and  foot  and  rule  the  account.  Transfer  the  amount,  in  black  ink, 
to  the  opposite  side  of  the  Proprietor's  account  on  the  first  line  below  the  ruling  under 
date  of  April  ist. 

The  following  represents  the  form  of  a  Proprietor's  account  properly  footed  and  ruled. 
The  figures  in  the  amount  columns  are  different  from  the  figures  in  your  books. 


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Accounts  of  Finance. — With  the  exception  of  the  Proprietor's  account,  it  is  not 
customary  to  close  the  accounts  of  finance.  Should  a  personal  account  balance  at  any 
time,  it  may  be  footed  and  ruled,  or  a  single  red  line  may  be  drawn  under  each  side  to 
indicate  that  the  account  balances.  (See  model  on  page  41.)  Should  it  be  desired  to 
close  the  accounts  of  finance  at  any  time,  this  may  be  done  by  taking  the  difference  between 
the  sides  and  placing  it  on  the  smaller  side,  in  red  ink,  writing  the  word  Balance  in 
the  explanation  column.  (See  Cash  account  in  model  ledger,  page  41.)  The  accounts 
may  then  be  footed  and  the  red  ink  balance  brought  below  the  ruled  lines  on  the  opposite 
side  from  which  it  is  written. 


40  MODERN    ILLUSTRATIVE    BOOKKEEPING. 


INSPECTION    BY  TEACHER. 

Your  ledger  is  now  closed.  Present  the  work  to  your  teacher  for  inspection.  Be  sure 
that  every  detail  has  received  proper  attention,  and  that  no  dates,  page  marks,  nor  expla- 
nations have  been  omitted.  Notice  the  fact  that  your  closing  entries  in  the  ledger  are 
in  red  ink,  and  that  all  transfers  are  in  black  ink.  Some  accountants  use  no  red  ink,  but 
make  all  entries  and  rulings  in  black  ink. 

PROOF  TRIAL    BALANCE. 

After  closing  the  ledger,  the  student  should  take  off  a  proof  trial  balance  in  order  to  be 
sure  that  the  ledger  is  in  balance  before  making  additional  entries  therein. 

HOW  TO    MAKE    OUT  A    PROOF   TRIAL   BALANCE. 

Take  a  sheet  of  ordinary  journal  paper,  and  at  the  top  write  the  heading  Proof  Trial 
Balance,  March  j/,  igo-.  Do  not  write  the  names  of  the  accounts  in  the  explanation 
column,  as  the  amounts  are  sufficient  for  this  work  (see  illustration,  page  47).  Commence 
with  the  first  account  in  your  ledger.  If  the  balance  is  on  the  debit  side,  write  the  balance 
in  the  debit  column  of  your  proof  trial  balance;  if  the  balance  is  on  the  credit  side,  write 
the  balance  in  the  credit  column.  In  the  present  instance  the  balance  as  shown  by  your 
account  is  $3042.70.  Place  this  in  the  credit  column  of  your  trial  balance.  The  balance 
as  shown  by  your  Merchandise  account  (as  brought  below  the  ruled  lines)  is  $2416.20. 
Place  this  in  the  debit  column  of  your  trial  balance.  There  is  no  balance  shown  b}^  the 
Expense  account  or  Loss  and  Gain  account,  so  omit  these  accounts  from  your  trial  balance. 
The  balance  shown  by  your  Cash  account  is  $1145.50.  Place  this  in  the  debit  column  of 
your  trial  balance.  Continue  this  process  until  the  balances  of  all  the  accounts  in  your 
ledger  have  been  placed  on  your  trial  balance,  then  foot  your  trial  balance.  If  it  balances, 
present  it  to  j^our  teacher  for  examination  and  approval. 

QUESTIONS. 

1 .  What  class  of  accounts  should  be  closed  first  ? 

2 .  What  should  be  done  with  inventories  ? 

3.  In  what  color  should  they  appear  on  the  ledger? 

4.  In  what  color  should  closing  entries  always  be  written? 

5.  In  what  color  should  transfers  be  written? 

6.  What  shovild  the  debit  side  of  the  Loss  and  Gain  account  show? 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


47 


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7.  When  all  transfers  have  been  made,  what  should  the  credit  side  of  the  Loss  and 
Gain  account  show? 

8.  What  should  the  difference  between  the  two  sides  of  the  Loss  and  Gain  account 
show  ?     To  what  account  should  this  difference  be  transferred  ? 

9.  How  should  the  Proprietor's  account  be  closed? 

10.  Where  should  the  Proprietor's  present  worth  appear  after  the  ledger  is  closed? 

11.  Where  should  the  inventory  of  merchandise  appear  after  the  ledger  is  closed? 

12.  If  accounts  of  finance  are  closed,  what  is  the  process? 

13.  What  is  the  object  of  a  second  trial  balance  after  closing  the  ledger? 

14.  Explain  the  process  of  taking  a  second  or  proof  trial  balance. 


48  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

THE   TEST    LEDGER    NO.   1. 

Apply  to  your  teacher  for  test  ledger  number  one.  Take  a  trial  balance,  make  state- 
ments of  losses  and  gains  and  resources  and  liabilities,  close  the  ledger  according  to 
instructions  given  below,  and  present  it  to  your  teacher  for  examination  and  approval. 

DIRECTIONS  FOR   CLOSING  TEST   LEDGER   NO.   1. 

Write,  in  red  ink,  on  the  credit  side  of  Merchandise  account.  Inventory,  with  the 
amount,  $2^jo.^3.     Foot  the  credit  side  of  the  Merchandise  account  and  on  the  debit 

side  write,  in  red  ink.   Gain,  with   the  amount  % .      Rule  the  account   and  foot 

the  debit  side.  Transfer  the  inventory  to  the  opposite  side  of  the  Merchandise  account 
under  date  of  Oct.  i,  and  the  gain  to  the  credit  side  of  Loss  and  Gain  account.  In  what 
color  should  transfers  be  made? 

Write  on  the  credit  side  of  Expense  account,  Loss,  $12^,  in  red  ink.  Rule  and 
foot  the  account.     Transfer  the  red  ink  entry  to  the  opposite  side  of  Loss  and  Gain  account. 

Close  your  Loss  and  Gain  account  hy  writing,  in  red  ink,  T.  M.  Hunter,  on  the 
smaller  side  of  the  account.  Rule  and  foot  the  account.  Transfer  the  red  ink  entry  to 
the  opposite  side  of  T.  M.  Hunter's  account. 

Close  T.  M.  Hunter's  account  b}^  writing,  in  red  ink.  Present  Worth  on  the  debit 
side  wTth  the  necessary  amount  to  balance  the  account.  Transfer  the  present  worth  to 
the  opposite  side  of  T.  M.  Hunter's  account  under  date  of  Oct.  i. 

Remember  that  closing  entries  are  always  made  in  red  ink  and  transfers  in  black  ink. 
Present  your  test  ledger  to  your  teacher  for  approval. 

TEST    LEDGER    NO.   2. 

Apply  to  your  teacher  for  test  ledger  number  two.  Take  a  trial  balance,  make  state- 
ments, close  the  ledger,  and  present  to  your  teacher  for  examination  and  approval. 

DIRECTIONS  FOR  CLOSING  TEST   LEDGER   NO.  2. 

Close  Merchandise  account  as  in  test  ledger  No.  i,  and  as  in  ledger  for  March. 

Close  Expense  account  as  in  test  ledger  No.  i,  and  as  in  ledger  for  March. 

On  the  credit  side  of  Merchandise  Discount  write,  in  red  ink.  Loss,  with  the  amount 
required  to  balance  the  account.  Transfer  this  red  ink  entry  to  the  debit  side  of  Loss  and 
Gain. 

Close  Loss  and  Gain  account  as  in  test  ledger  No.  i,  and  as  in  ledger  for  March. 

Close  T.  W.  Bowen's  account  as  the  Proprietor's  account  is  closed  in  test  ledger  No.  i, 
and  as  in  ledger  for  March. 

Be  sure  that  you  make  no  red  ink  entries  without  making  transfers.  Always  make 
closing  entries  in  red  and  transfers  in  black. 

The  amount  of  the  inventory  is  $4502.96. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  49 


INSTRUCTIONS  TO   THE    STUDENT. 

You  are  now  to  act  as  bookkeeper  for  James  M.  Hastings,  who  commences  the  Flour, 
Grain  and  Produce  business  to-day  (April  i),  at  146  Elm  St.,  your  city.  You  will  receive 
a  salary  of  $60  per  month.  Your  teacher  will  furnish  you  all  the  vouchers  (business 
papers)  and  blank  forms  necessary  to  perform  the  numbered  transactions  which  follow. 

You  will  get  the  same  experience  you  would  in  a  real  business,  so  far  as  it  is  possible 
within  the  limits  of  a  school  to  give  this  experience.  Bills  of  merchandise  bought,  and 
other  business  papers,  will  be  given  you  by  your  teacher,  or  will  come  from  a  pad  of 
incoming  vouchers,  just  as  they  would  come  to  the  business  house  by  mail.  These  papers 
are  similar  in  every  respect  to  those  used  in  business.  All  papers  issued  by  the  business 
are  to  be  written  up  by  you,  and  all  transactions  must  be  recorded  in  the  books  exactly 
as  in  real  business. 

As  ]\Ir.  Hastings  attends  to  the  buying  and  selling,  and  is.  absent  from  the  city  a  large 
part  of  the  time,  it  will  be  necessary  that  5'ou  sign  and  indorse  notes,  checks  and  other 
negotiable  paper  during  his  absence,  as  well  as  keep  the  books  of  the  business.  In  order 
to  do  this,  you  must  have  a  power  of  attorney.  Mr.  Hastings  gives  this  to  you,  and  it 
forms  the  first  of  your  incoming  vouchers,  which  you  will  find  in  a  pad  marked  ' '  Incoming 
Vouchers."  Remove  this  power  of  attornej^  from  the  pad  and  fill  out  the  blank  spaces. 
Read  it  carefully  and  see  what  powers  it  confers  upon  you,  then  fold  lengthwise  and  write 
on  the  upper  right-hand  corner,  Power  of  Attorney,  J.  M.  Hastings,  April  i,  and  the 
current  year,  and  place  the  paper  in  your  Voucher  File. 

A  power  of  attorney  is  a  legal  document  which,  confers  upon  the  holder  the  right  to  perform  certain 
acts  specified  therein,  in  the  name  of  some  other  person  who  issues  the  power  of  attorney.  It  is  generally 
witnessed  by  a  notary  public,  who  stamps  the  document  with  his  seal. 

Such  a  power  of  attorney  as  you  have  received  should  be  presented  at  the  bank  with  which  the  maker 
does  business,  and  also  at  the  post-office  and  express  office,  as  it  gives  the  holder  the  right  to  indorse 
post-ofiice  and  express  money  orders  in  the  name  of  the  maker. 

You  will  receive  all  goods  pturchased,  deliver  the  goods  sold,  and  make  a  full  and 
complete  record  in  the  books  of  the  business  of  all  transactions  which  ma}'  occur. 

The  work  in  your  books  will  not  be  like  the  work  of  any  other  student.  Your  selling 
price-list  will  be  assigned  by  your  teacher  from  the  numbered  lists  found  in  the  text-book, 
page  66.  Your  price-list  will  be  unlike  that  of  any  other  student,  and  you  must  adhere 
strictly  to  this  price-list  in  order  to  get  correct  results. 

Do  not  compare  your  books  with  those  of  other  students.  The  results  will  be  different, 
and  you  cannot  learn  too  earl);  the  habit  of  self-reliance.  Understand  why  you  make  each 
record,  and  you  will  succeed. 

Before  making  the  entry  in  your  books  for  any  transaction, determine  first  which  accounts 
are  affected  by  that  transaction,  and  then  which  account  is  to  be  debited  and  which  is  to 
be  credited,  by  applying  the  rules  for  debit  and  credit  in  the  journal  exercises  to  which 
you  will  be  referred  by  number. 

Books  Kept. — The  books  which  you  will  keep  in  this  work  are  the  joiu-nal-daybook 
and  the  ledger  as  principal  books,  and  the  check  book  as  an  auxiliary  book. 

Com. — 4 


50 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


WORK   FOR   THE    STUDENT. 

Jfo.  1. — Aprii.  I.  After  reading  your  instructions  carefully,  ask  your  teachier  to 
assign  you  a  selling  price-list,  and  take  from  3'our  incoming  voucher  pad  the  cash  which 
shall  constitute  Mr.  Hastings'  investment.  After  this  has  been  done,  count  your  cash 
and  place  it  in  the  envelope  entitled  "  Cash  Drawer,"  which  j^ou  will  find  in  3^our  large 
envelope  entitled  "  Business  Forms." 

Determine  the  debit  by  reading  rule  3,  page  10;  determine  the  credit  by  reading  rule 
4,  page  II.  For  transaction  similar  to  this,  see  transaction  No.  i,  page  10.  Make  proper 
entry  in  your  journal-daybook.  The  following  illustrates  the  form  of  your  entry,  though 
the  amounts  and  explanation  are  different. 


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Xo.  2. — April  i.  Mr.  Hastings  has  rented  the  building  at  146  Elm  St.  from  R.  B. 
Hines.  According  to  the  lease  he  is  to  pay  $100  per  month  rent.  Pay  the  rent  for  April 
in  cash,  placing  the  cash  in  your  "  Cash  Paid  Out"  envelope. 

Determine  the  debit  by  rule  5,  page  11;  determine  the  credit  by  rule  6,  page  11.  The 
following  illustrates  the  form  of  your  entry,  though  the  amounts  and  explanation  are 
diiferent. 


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Figures  in  the  Cents  Column. — When  the  amount  to  be  written  consists  of  an  even  number  of 
dollars,  it  is  the  custom  of  some  bookkeepers  to  leave  the  cents  column  blank,  while  others  write  two 
ciphers  in  that  column.  A  common  error  in  bookkeeping  is  to  omit  the  cents  of  an  amount.  If  the 
ciphers  are  written  in  the  cents  column  when  the  amount  is  an  even  number  of  dollars,  this  error  is  not 
likely  to  occur,  otherwise  the  writing  of  ciphers  in  the  cents  column  is  a  waste  of  time  and  makes  the 
addition  of  a  long  colunm  of  figures  more  difficult.  The  better  method  is  to  indicate  even  dollars  by 
writing  a  light  dash  in  the  cents  column,  as  shown  in  the  model  below. 

Flour,  25obrls.,  at  4.50  11 25  — 

Oats,  600  Im.,  36'/  216  — 

Corn,  225  bu.,  505?*  112  50 

Rye,  loi  bu.,  50^           5050 

Barley,  loobu.,  48c'-           48 —     1552  — 


MODERN    ILLUSTRATIVE    IJOOKKEEl'ING. 


51 


In  paying  out  money  always  make  payment  in  bills  of  the  largest  denominations  pos- 
sible. In  this  instance  you  should  take  a  hundred-dollar  bill.  Should  you  have  occasion 
to  pay  out  $75,  3^ou  should  make  payment  by  using  one  fifty-dollar  bill,  one  twenty-dollar 
bill,  and  one  five-dollar  bill. 

Read  the  lease  carefully  and  see  what  rights  and  restrictions  it  mentions.  Place  the 
receipt  and  the  lease  in  the  envelope  marked  "  Vouchers  for  Others." 

No.  3. — April  2.  This  bill  shows  a  cash  purchase  from  Daniels  Bros,  of  200  brls. 
flour  at  $4.20  per  brl.,  400  bu.  oats  at  2-^i  per  bu. 

You  will  find  this  invoice  (No.  3)  with  merchandise  cards  (No.  3)  on  a  pad  in  j'our 
envelope  entitled  "Incoming  Vouchers."  The  vouchers,  cards,  etc.,  on  this  pad  are 
numbered  to  correspond  with  the  numbers  of  the  transactions  in  this  book.  Be  sure  that 
the  number  of  the  voucher  and  the  number  of  the  transaction  agree  before  attempting  to 
make  a  book  entry.  Detach  the  invoice  and  the  merchandise  from  the  pad.  See  that 
you  have  on  your  cards  the  amount  of  flour  and  oats  called  for  in  the  bill,  and  if  so,  check 
each  item  on  the  bill,  using  pen  and  ink  and  placing  a  check  mark  in  the  vertical  column 
at  the  left  of  the  bill.  See  that  the  multiplications  and  additions  are  correct,  placing  a 
check  mark  against  each  correct  amount  at  the  right.  If  the  bill  is  correct,  write  O.  K., 
with  your  initials  underneath,  in  the  lower  left-hand  corner.  The  following  represents 
the  form  of  a  bill  after  it  has  been  treated  as  explained  above. 


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52 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


If  the  bill  is  correctly  made  out,  take  the  money  to  pay  it  from  your  Cash  Drawer,  and 
place  it  in  "Cash  Paid  Out"  envelope.  Place  the  merchandise  in  the  envelope  marked  "Store 
Room."  Determine  the  journal  entry  by  referring  to  rule  7,  page  12,  and  rule  6,  page  1 1 . 
The  following  illustrates  the  form  of  your  entry,  though  the  amounts  and  explanation  are 
different. 


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60 


Fold  the  bill  lengthwise,  face  outward,  and  write  across  the  face,  Eyitered,  with  the 
date  underneath.     Place  it  in  the  envelope  entitled  "Voucher  File." 

No.  4. — ApriIv  2.  This  bill  shows  a  purchase  from  D.  Deavenport  &  Co.,  for  cash, 
of  1200  bu.  corn  at  28!^'  per  bu.,  150  brls.  apples  at  $1.65  per  brl. 

Check  and  O.  K.  the  bill  as  in  No.  3.  Take  cash  to  pay  the  bill  from  your  Cash 
Drawer,  and  place  in  "Cash  Paid  Out"  envelope.  Place  the  merchandise  in  the  Store 
Room.  Your  journal  entry  will  be  similar  to  No.  3.  Fold  the  bill,  write  Entered  across 
the  face,  and  file  as  in  No.  3.  Follow  all  instructions  in  the  exact  order  in  which  they 
are  given. 

No.  5. — Aprii,  3.  Mr.  Hastings  has  taken  this  order  and  received  the  cash  for  the 
goods,  50  brls.  apples,  50  brls.  floiu. 

Copy  the  selling  price-list  which  your  teacher  assigned  you  on  voucher  No.  5a,  and 
paste  it  on  the  inside  of  the  front  cover  of  your  text-book. 

Select  from  your  Store  Room  the  merchandise  which  the  order  calls  for,  and  make  out 
a  bill  to  J.  A.  Barker  at  your  selling  price  on  one  of  the  blank  billheads  which  3'ou  will 
find  in  your  envelope  entitled  "  Business  Forms."  Use  one  of  the  bills  in  your  Voucher 
File  as  a  model. 

After  making  out  the  bill,  review  yoiu*  multiplications  and  additions  so  as  to  be  posi- 
tive that  they  are  correct.  Remember  that  bills  sent  from  an  ofiice  viust  be  right.  If  the 
bill  is  correctly  made  out,  its  amount  will  agree  with  the  cash  received  with  the  order 
(No.  5),  and  yow  may  receipt  the  bill  and  place  the  cash  in  your  Cash  Drawer. 

Place  the  merchandise  and  the  receipted  bill  in  the  envelope  entitled  ' '  "\'ouchers  for 
Others."  Determine  the  debit  by  reading  rule  3,  page  10;  determine  the  credit  by  reading 
rule  8,  page  12.  The  following  illustrates  the  form  of  the  journal  entry,  though  the 
amounts  and  explanation  are  different. 


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MODERN    ILLUSTRATIVE    BOOKKEEPING.  '  53 

You  will  notice  that  all  merchandise  which  you  sell  is  itemized  in  your  journal-daybook, 
while  that  which  you  buy  is  entered  in  total  only.  In  selling  merchandise  j'ou  give  a  bill 
to  the  person  to  whom  the  sale  is  made,  and  to  preserve  a  complete  record  of  the  sale  you 
must  enter  the  items  singly  in  your  journal-daybook,  for  the  purchaser  may  require  of 
you  a  duplicate  bill  at  any  time,  and  unless  you  have  the  items  in  your  books  it  will  be 
impossible  to  prepare  the  duplicate. 

When  you  buy  merchandise  you  receive  a  bill,  and  as  this  bill  is  on  file  you  can  refer 
to  it  at  any  time  that  you  desire  to  examine  the  items,  so  that  it  is  necessary  to  enter  the 
total  only  in  your  journal-daybook. 

No.  6. — April  3.  Purchase,  for  cash,  from  ly.  A.  Wright  &  Co.,  1000  bu.  oats,  125 
brls.  flour. 

You  will  find  this  invoice  (No.  6)  and  the  merchandise  cards  (No.  6)  on  the  pad  of 
incoming  vouchers.  Detach  the  invoice  and  the  merchandise  from  the  pad,  and  compare 
the  merchandise  cards  with  the  items  on  the  invoice;  if  correct,  check  the  items  and  verify 
the  calculations. 

Pay  the  bill  by  taking  the  proper  amount  of  cash  from  your  Cash  Drawer  and  placing 
it  in  the  envelope  entitled  "  Cash  Paid  Out."  In  paying  cash  in  this  work  always  place 
the  cash  in  the  envelope  entitled  "  Cash  Paid  Out."  This  envelope  will  be  delivered  to 
your  teacher  after  the  work  has  been  completed. 

Place  the  merchandise  in  the  Store  Room  and  make  proper  entry  in  your  journal- 
daybook.  (For  entry  similar  to  this,  see  transaction  No.  3,  page  51.)  Fold  and  file 
your  invoice  according  to  instructions  given  in  transaction  No.  3,  page  52. 

No.  7. — April  4.  You  have  purchased,  for  cash,  books  and  stationery  as  per  invoice 
No.  7. 

Take  the  invoice  (No.  7)  from  yotu  incoming  voucher  pad,  verify,  and  if  correct  write 
your  initials  under  the  O.  K.  and  pay  the  bill,  placing  the  cash  in  the  envelope  entitled 
"Cash  Paid  Out."  Determine  the  account  to  be  debited  by  reading  rule  5,  page  11; 
determine  the  account  to  be  credited  by  reading  rule  6,  page  11.     Fold  and  file  the  bill. 

No.  8. — April  4.  Sell  B.  M.  Smythe  &  Co.,  for  cash,  900  bu.  oats,  900  bu.  corn  at 
your  selling  price. 

Proceed  according  to  directions  given  in  transaction  No.  5,  page  52.  Place  the  mer- 
chandise cards,  with  a  receipted  bill,  in  Vouchers  for  Others.  Always  count  your  cash 
before  receipting  a  bill.  Determine  the  debit  by  rule  3,  page  10;  determine  the  credit  by 
rule  8,  page  12. 

No.  9. — April  4.  You  have  bought  merchandise  on  account,  as  shown  in  invoice 
(No.  9)-  _ 

Detach  the  invoice  and  the  merchandise  cards  from  the  pad.  Verify  the  calculations 
and  O.  K.  the  bill;  if  it  is  correct,  place  the  merchandise  in  the  Store  Room.  Make  the 
proper  entry  in  your  journal-daybook.  For  entry  similar  to  this,  see  transaction  No.  15, 
page  23.     Determine  the  debit  by  rule  7,  page  12;  determine  the  credit  by  rule  9,  page  23. 

This  bill  is  not  receipted.  Why  not?  Fold  lengthwise,  write  Eiitered  across  the  face, 
with  the  date,  and  place  it  in  your  Invoice  File.  Place  all  bills  bought  on  account  in  the 
envelope  entitled  "  Invoice  File." 

No.  10.— April  4.  FIRST  REPORT.  Detach  the  report  blank  (No.  10)  from  your 
incoming  voucher  pad,  and  from  your  journal  entries  determine  how  much  cash  has  been 


54 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


received.  This  will  be  shown  by  taking  the  sum  of  3-our  cash  debits.  Write  the  amount 
opposite  Cash  Received  in  the  report.  From  the  cash  credits  in  the  journal  find  how  much 
cash  has  been  paid  out,  and  write  it  opposite  Cash  Paid  OiU  in  the  report.  Write  the 
difference  between  the  cash  received  and  the  cash  paid  out  opposite  Cash  on  Hand  in  the 
report.  This  amount  should  agree  with  the  amount  of  cash  in  your  Cash  Drawer;  if  it 
does  not,  trace  the  error.  From  the  credits  of  merchandise  in  your  journal  find  how  much 
merchandise  3'ou  have  sold,  and  place  it  opposite  Dills  of  Merchandise  Sold  in  the  report. 
These  are  all  the  results  required  in  the  first  report. 

You  will  now  present  the  report  to  your  teacher,  with  your  journal,  "Vouchers  for 
Others"  and  "  Cash  Paid  Out"  envelopes.  Examine  every  voucher  carefully  to  see  that 
it  is  correctly  made  and  checked,  as  well  as  neatly  written.  Poor  work  will  not  be 
accepted,  and  it  is  a  waste  of  time  to  hand  it  in.  Rewrite  all  work  that  is  not  your  best 
before  presenting  it  for  inspection.  If  your  work  meets  your  teacher's  approval,  he  will 
retain  your  Cash  Paid  Out,  returning  the  remainder  of  j^our  vouchers  with  3-our  journal. 

No.  1 1. — Aprii.  5.  Mr.  Hastings  has  decided  to  open  a  bank  account  and  has  selected 
the  Commercial  Bank  as  the  institution  with  which  to  do  business. 

Method  of  Opening-  a  Bank  Account. — If  the  person  who  wishes  to  open  a  bank 
account  is  not  acquainted  with  the  officers  of  the  bank,  he  should  get  some  one  to  intro- 
duce him.  At  the  time  of  the  introduction  the  cashier  takes  the  depositor's  signature  in 
a  signature  book  or  on  a  card.  The  following  represents  the  form  of  signature  card  when 
a  person  signs  as  attorney. 

Form  op  Signature  Card. 


R 

NAME 

BUSINESS. 

By  Whom  Introduced. 

c=>CJ^~:^^S^^7^:rz^^ 

/t^^^^  P^yc:Af^-z:z^^<^ 

In  this  instance  3'ou  represent  Mr.  Hastings,  and  he  has  given  30U  the  power  of 
attorne3^  to  sign  his  name.  Take  the  power  of  attorney  (No.  A)  from  3'our  Voucher 
File,  and  read  it  carefully.  Next  detach  the  blank  card  (No.  11)  from  your  incoming 
voucher  pad,  and  write  the  name  of  J.  M.  Hastings  and  3'our  name  thereon,  according  to 
form  shown  above.  You  should  write  the  signature  on  the  card  in  the  exact  manner  in 
which  you  propose  to  write  it  on  checks.  Give  the  card  to  the  bank.  In  case  there  is  no 
regular  bank  in  the  school,  your  teacher  will  receive  your  signature  card  and  transact 
with  you  the  business  of  the  bank.  Make  out  a  deposit  ticket  for  $5000.  The  model 
shown  on  page  55  illustrates  the  form  of  ticket  you  should  make  out. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


00 


In  making  out  a  deposit  ticket  be  sure  to  list  currency  and  checks  separately.  Each 
check  should  be  set  down  as  a  separate  and  distinct  item.  Take  $5000  in  cash  from  the 
Cash  Drawer,  and  take  the  money,  deposit  ticket  and  bank  pass  book  to  the  bank  and 
present  them  to  the  teller,  who  will  receive  the  cash  and  give  you  credit  for  the  amount, 
by  entering  it  upon  the  left-hand  page  of  the  bank  pass  book,  with  the  date  and  his  initials. 
(If  the  school  has  no  regular  bank,  go  to  your  teacher,  who  will  make  the  teller's  entry.) 

Form  of  Deposit  Ticket. 


DEPOSITED    BY 

^         IN   V                           \ 

Commercial  Bank 

UmaSt:  ttgrBCKafggfe^tJ-ffRftTELY    :i 

Currency 

Checks 

11 

Dollars 
^jT^  /p  (p 

Cents. 

11 

11 

n 

•n 

•n 

11 

« 

n 

Make  a  record  of  the  deposit  on  the  stub  of  the  check  book  according  to  the  following 
form . 

Form  of  Check  and  Stub. 


Deposited . 


Lyr^i6-<^.  V 


^ 


jTc^c^ 


Dale 

Order  of 


^igo 


For  . 


A  mail  til  of  Hill,         $  _ 

DtscQunt i,  S- 

A  mou  Tit  of  Ch  -^ct^      S  - 


fYour  pl»ce  ber«.) 


ys(i_  T&_ 


Lomr/m/aa/y    Mo'/iAy 


^.6^<//\. 


Make  no  journal  entry  for  this  transaction.     The  $5000  has  not  left  the  business,  but 
has  been  placed  in  the  bank  for  safe  keeping  and  is  still  at  yom:  disposal. 


56  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

No.  12. — April  5.  On  your  incoming  voucher  pad  you  will  find  an  order  (No.  12) 
for  merchandise  from  Chas.  E.  Hayes,  who  wishes  to  purchase  on  account. 

Select  the  goods  from  the  Store  Room  and  check  each  item  on  the  order  as  soon  as 
filled.  Make  out  the  bill  from  yoirr  price-list,  but  do  not  receipt  it.  Place  the  number 
(12)  on  the  bill.  Verif}^  yoirr  calculations  and  make  your  journal  entr3^  Determine  the 
debit  by  rule  10,  page  24;  determine  the  credit  by  rule  8,  page  12. 

In  filling  orders  be  sure  that  the  proper  merchandise  cards  accompanj'  each  bill.  Unless  you  are 
careful  in  this  respect,  you  wHill  not  have  the  right  quantity  of  merchandise  on  hand  when  you  take  j-om* 
inventory  at  the  end  of  the  month.  If  you  have  followed  directions,  the  cards  in  your  Store  Room 
•will  then  agree  with  the  quantit}-  of  merchandise  on  hand. 

Place  the  merchandise  and  the  bill  in  the  envelope  entitled  "Vouchers  for  Others." 
Fold  the  order  lengthwise,  face  outward,  and  write  Filled,  with  the  date,  across  the  face. 
Place  the  order  in  the  Voucher  File. 

No.  13. — April  6.     This  order  calls  for  merchandise  to  be  sold  on  account. 

Select  the  goods  and  check  each  item  upon  the  order  as  filled.  Verify  your  calcula- 
tions and  place  the  order  number  on  this  and  all  following  bills.  Make  entry  similar  to 
that  for  transaction  No.  12.     Fold  and  file  the  order. 

No.  14. — April  8.  This  invoice  of  merchandise  (No.  14)  is  purchased  on  account. 
When  terms  are  not  mentioned,  it  is  understood  that  the  piu-chase  is  on  account.  Com- 
pare the  merchandise  with  the  items  on  the  bill,  and  check  each  amount  if  correct. 
O.  K.  the  bill,  file  it,  and  make  your  journal  entr3\  Determine  the  debit  by  rule  7,  page 
12;  determine  the  credit  by  rule  9,  page  23. 

No.  15. — April  8.  You  have  received  cash  (No.  15)  in  part  payment  of  bill  sold  to 
Chas.  E.  Hayes  on  the  5th  inst. 

Count  the  cash,  and  if  correct,  write  a  receipt  for  the  amount,  using  No.  2  as  model. 
Place  the  cash  in  your  Cash  Drawer  and  the  receipt  in  Vouchers  for  Others.  Make 
proper  entry  in  your  journal-daybook.  Determine  the  debit  by  rule  3,  page  10;  deter- 
mine the  credit  by  rule  11,  page  25. 

No.  le. — April  9.      Pay  Hatheway  &  Reynolds  $400  in  cash. 

Take  the  cash  from  your  Cash  Drawer  and  place  it  in  the  "Cash  Paid  Out"  envelope, 
taking  a  receipt  (No.  16)  for  the  amotint.  Place  the  receipt  in  j'our  Voucher  File. 
Make  proper  entry  in  your  journal-daybook.  Determine  the  debit  by  rule  12,  page  25; 
determine  the  credit  by  rule  6,  page  11. 

No.  17. — April  10.  Mr.  Hastings  has  ordered  this  merchandise  on  account  from 
Geo.  C.  Cary. 

Examine  the  merchandise  and  see  that  it  corresponds  with  the  quantities  called  for  in 
the  invoice.  Check  each  item,  verify  the  calculations,  and  O.  K.  the  bill.  Make  proper 
entry  in  your  journal-daybook.  Determine  the  debit  by  rule  7,  page  12;  determine  the 
credit  by  rule  9,  page  23.     Fold  the  bill  and  place  it  in  your  Invoice  File. 

No.  18. — April  10.  This  note  has  been  received  from  Ellis  &  Rand  in  part  payment 
for  transaction  No.  13. 

Examine  the  note  carefully.  Who  promises  to  pay  the  note?  Who  should  receive 
credit  for  this  note?     Make  proper  entry  in  your  journal-daybook.      Determine  the  debit 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  57 

by  rule  15,  page  29;    determine  the  credit  by  rule  11,  page  25.     Place  the  note  in  your 
Cash  Drawer  and  keep  it  there  until  it  is  disposed  of  or  paid. 

Notes  are  not  cash,  but  are  kept  in  the  Cash  Drawer  for  convenience  only. 

No.  19. — April  ii.     This  order  from  Chas.  E.  Hayes  is  for  merchandise  on  account. 
Select  the  merchandise  from  the  Store  Room  and  make  out  the  bill.      Verify  your 

calculations  and  make  proper  journal  entry.      Determine  the  debit  by  rule  10,  page  24; 

determine  the  credit  by  rule  8,  page  12.     Place  the  bill  and  the  merchandise  in  Vouchers 

for  Others. 

Xo.  20. — April  12.  This  invoice  is  for  merchandise  purchased  from  L.  A.  Wright 
&  Co.  on  account. 

Check  each  item  on  the  bill  as  you  compare  the  merchandise  with  the  items.  Verify 
the  calculations;  if  correct,  O.  K.  the  bill.  Place  the  merchandise  in  the  Store  Room. 
Make  proper  joiu-nal  entry.  Determine  the  debit  by  rule  7,  page  12;  determine  the  credit 
by  rule  9,  page  23. 

No.  21.— April  14.  Give  L>.  A.  Wright  &  Co.  Mr.  Hastings'  note  for  $400,  at  10 
days,  on  account. 

Make  out  a  note,  using  Voucher  No.  18  as  model;  also  see  form  of  note,  transaction 
No.  54,  page  30.  Be  sure  to  fill  out  the  blanks  on  the  stub  of  your  note  book  before 
removing  the  note.  Make  proper  jom^nal  entry.  Determine  the  debit  by  rule  12,  page 
25;  determine  the  credit  by  rule  16,  page  30.  Place  this  note  in  the  envelope  entitled 
"  Bills  Payable  File,"  which  you  will  find  in  your  package  of  Business  Forms.  Do  not 
lose  the  contents  of  this  envelope,  as  you  will  be  required  to  take  from  it  each  note  or 
bill  payable  when  it  becomes  due. 

No.  22. — April  14.     This  order  from  Ellis  &  Rand  is  for  merchandise  on  account. 
Select  the  goods  and  make  out  the  bill.     Verify  the  calculations  and  make  journal 
entry.     Place  all  bills  to  others  with  goods  sold  in  Vouchers  for  Others. 

No.  23. — April  16.      C.  E.  Hayes  has  given  his  check  to  apply  on  account. 

The  check  is  regarded  as  cash,  because  it  can  be  converted  into  cash  at  once  by 
presenting  it  at  the  bank.  Examine  the  check  carefully  to  see  that  it  is  properly  dated, 
filled  out,  and  signed.  Make  proper  journal  entry.  Determine  the  debit  by  rule  3,  page 
10;  determine  the  credit  by  rule  11,  page  25.  Place  the  check  in  your  Cash  Drawer  and 
count  it  as  part  of  your  cash. 

A  check  is  an  order  written  by  a  depositor,  requesting  the  bank  in  which  he  has  money  deposited  to 
pay  a  certain  amount  to  some  person  named,  or  to  his  order,  upon  presentation  of  the  check.  The  bank 
will  require  the  person  named  to  be  identified,  if  he  is  not  personally  known,  and  will  also  require  him 
to  indorse  the  check;  that  is,  write  his  name  across  the  back  at  the  left  end  of  the  check  about  one  inch 
from  the  top. 

No.  24.— April  16.  SECOND  REPORT.  From  your  journal  find  out  how  much 
cash  has  been  received  since  the  first  report  was  made  out,  April  4,  and  wTrite  it  opposite 
Cash  Received.  Find  the  amount  of  cash  paid  out  during  the  same  space  of  time,  and 
place  it  opposite  Ca:>h  Paid  Out.  Add  the  cash  received  to  the  cash  on  hand  shown  in  the 
first  report*,  and  subtract  the  cash  paid  out  from  this  amount.  The  remainder  wall  be 
the  amount  of  cash  on  hand;  but  $5000  of  the  cash  on  hand  is  in  the  Commercial  Bank,  as 
shown  by  the  stub  of  your  check  book.  Write  this  $5000  opposite  Cash  in  Bank,  subtract 
from  the  cash  on  hand,  and  the  remainder  will  be  the  amount  in  the  cash  drawer,  which 
should  agree  with  the  actual  currency  in  yotur  Cash  Drawer. 


58 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Find  the  amount  of  merchandise  sold  since  the  first  report;  also  notes  issued  by  the 
business.  The  latter  will  be  found  by  taking  the  credits  of  Bills  Payable  in  your  jom-nal, 
which  should  correspond  with  the  bills  payable  in  your  envelope  entitled  ' '  Bills  Payable 
File." 

Examine  your  vouchers  to  see  that  they  are  correct  in  every  respect.  Hand  the 
report,  with  your  joiu-nal,  Cash  Paid  Out,  and  \"ouchers  for  Others,  to  your  teacher. 

No.  25. — April  17.     Give  George  C.  Gary  a  check  for  $300,  to  apply  on  account. 

Open  your  check  book  and  fill  out  the  stub  as  shown  in  the  following  form  of  check 
book  stub.  The  stub  is  the  original  entry  of  this  transaction,  and  should  be  filled  out 
before  the  check. 

Form  of  Check  Stub  Filled  Out. 


r)ppn<:itfd       OiC,^2^^  ,  -r^    ,goj_ 


No.-Z^ 


Date 


UJ^Z^tgo. 


Order  of 


yO^-T:^'^^^ 


For}. 


a^ 


^.^ 


Amount  of  Bill,         $. 

Discount jS  $. 

Amount  of  Check,     $  . 

Deposited 


.  /po 


J'a  CP  c? 


^a  o 


CO 


^^ 


ao 

00 


Fill  out  the  check  according  to  form  given  below. 


(Your  place  here.) 


■  ^    ^^<  /-r,    y^^ 


r/w/m?'€ii 


/^^^^^;;^^^^/ig^fe;^/^- — <^-/.^'r:^TV^r^^^ 


2--^^-^. 


£^_ 


7^^^^.^.^^^^.-^^^,^^::/^^..^ 


/  e>—o 


<?lx. 


a/  /Qur//?j(>' 


.  X^C^^V^^^^^^^g^^^z^/. 


In  filling  out  a  check  be  sure  to  couinience  writing  the  uniount  of  dollars  at  the  extreme  left-hand 
end,  as  shown  in  model,  and  fill  up  the  blank  space  after  the  amount  with  a  waved  line.  Failure  to 
observe  these  instructions  inav  render  the  maker  of  a  check  liable,  in  case  the  check  should  bt  raised  by 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  59 

all}-  dishonest  person  into  whose  hands  it  might  happen  to  fall.     Sign  the  check  in  the  same  manner  in 
which  you  wrote  J.  M.  Hastings'  name  upon  the  signature  card. 

You  wdll  notice  that  the  above  check  is  made  payable  to  order.  When  a  check  is  so  written,  the 
holder  is  compelled  to  indorse  it  before  obtaining  money  thereon,  or  before  transferring  it  to  another 
person.  If  a  check  is  made  payable  to  bearer,  it  is  transferable  upon  deliver}^  without  indorsement. 
INIost  banks  require  all  checks  to  be  indorsed  before  they  will  cash  them.  This  is  not  necessary  if  the 
check  is  pavable  to  bearer,  but  such  practice  affords  a  means  of  identification  should  any  dispute  arise  as 
to  who  obtaine-1  the  money. 

Remove  the  check  from  the  check  book  and  place  it  in  Cash  Paid  Out.  Subtract  the 
amount  of  the  check  from  the  amount  in  the  bank,  and  bring  down  the  balance.  Geo.  C. 
Cary  will  present  this  check  at  the  bank,  and  when  the  bank  pays  it,  the  check  will  be 
charged  to  J.  M.  Hastings'  account  and  deducted  from  the  deposit  he  has  made. 

In  order  to  make  the  check  book  agree  with  the  bank  account,  you  must  subtract  all 
checks  when  given  and  add  all  deposits  when  made.  Errors  in  the  check  book  are  very 
common,  and  it  wdll  necessitate  the  utmost  care  on  your  part  to  prevent  their  occurrence. 

No.  26. — April  19.  This  order  calls  for  a  sale  of  merchandise  to  T.  W.  Bowen  & 
Co.,  on  account. 

Select  the  goods  to  fill  the  order,  checking  each  item  on  the  order  as  filled.  Make  out 
the  bill  and  verify  your  calculations.  Make  proper  journal  entry.  Place  the  goods  and 
bill  in  Vouchers  for  Others.     File  the  order. 

No.  27. — April  20.  This  check  has  been  received  from  T.  \V.  Bowen  &  Co.,  to 
apply  on  account. 

This  check  (No.  27)  is  in  part  payment  of  No.  26.  What  account  should  be  debited? 
Why?  What  account  should  receive  credit?  Why?  Make  proper  journal  entry  and 
place  the  check  in  your  Cash  Drawer. 

No.  28. — April  20.  Ellis  &  Rand's  note,  dated  Apr.  loth,  is  due  today,  and  they 
have  sent  a  check  for  the  amount  (No.  28). 

See  that  the  check  is  properly  filled  out,  and  that  the  amount  named  in  the  check 
agrees  with  the  amount  of  the  note.  Take  the  note  from  your  Cash  Drawer,  write  Paid 
across  its  face,  and  place  it  in  Vouchers  for  Others.  Place  the  check  in  the  Cash  Drawer 
and  make  proper  journal  entry.  Determine  the  debit  by  rule  3,  page  10;  determine  the 
credit  by  rule  17,  page  31. 

No.  29. — April  20.  Write  a  thirty-day  note  in  favor  of  Geo.  C.  Cary  for  balance 
due  him. 

Examine  the  entries  in  your  journal-daybook  and  be  sure  that  you  get  the  right 
amount.  Make  note  payable  at  your  office.  Journalize  the  transaction.  Determine  the 
debit  by  rule  12,  page  25;  determine  the  credit  by  rule  16,  page  30.  Place  the  note  in 
envelope  entitled  "  Bills  Paj-able  File,"  which  you  will  find  in  your  package  of  Business 
Forms. 

No.  30. — April  23.  You  have  purchased  merchandise  from  Grunsfeld  Bros,  on 
acc6unt. 

Compare  the  bill  received  and  check  the  items.  Store  the  merchandise.  Make  proper 
journal  entry  and  place  the  bill  in  the  Invoice  File. 


60 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


No.  31. — April  23.     Pay  Grunsfeld  Bros,  by  check,  $200,  on  account. 

Fill  out  the  stub  of  the  check  and  deduct  the  amount  from  the  balance  in  bank,  as 
shown  on  the  stub.  The  following  illustration  represents  the  stub  of  your  check  book 
properly  filled  out  to  date. 


Form  of  Check  Stub  Filled  Out. 


Date 

Order  of 


<   / p',.  190 


Z^^^..^^ 


For)  (J>^^^K7^.^.^.^^ 

Amount  of  Hill,         $ 

Discount )t  $ 

Amount  of  Check,     $ 


Deposited  . 


.  igo 


No.     Z,  , 


/^ 


Date  /^^<^<>6^    2-^^^.   igo  . 

Order  of 


fi^C^'<^ 


Fnr     Cy>^^K7^^^^^^^ 
Amount  of  Bill,         $. 

Discount 56  $. 

Amount  of  Check,      S- 


J'C?  iP  ^ 


^ao 


^  ¥/ 


a  c? 


Za  tp 


■i'^^O  CP 


a^ 


00 
00 


oc? 

CO 


Fill  out  check  in  favor  of  Grunsfeld  Bros,  for  $200.  Remove  the  check  from  your 
check  book  and  place  it  in  Cash  Paid  Out.  Make  proper  entry  in  your  journal-daybook. 
Determine  the  debit  by  rule  12,  page  25;  determine  the  credit  by  rule  6,  page  11.  Do 
not  omit  any  of  the  details  of  this  transaction. 

No.  32. — April  24.  The  note  (No.  21),  in  favor  of  Iv.  A.  Wright  &  Co.,  is  due 
to-day,  and  you  pay  it  with  a  check. 

From  your  envelope  entitled  "  Bills  Payable  File  "  remove  the  note  given  ly.  A.  Wright 
&  Co.,  dated  April  14th.  Fill  out  the  stub  of  your  check  book,  and  deduct  the  amoinit 
from  the  balance  in  bank;  then  fill  out  the  check,  remove  it  from  your  check  book  and 
place  it  in  your  Cash  Paid  Out.      Write  Paid^  April  2/,  in  red  ink,  across  the  face  of  the 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  61 

note.     Place  the  canceled  note  in  your  Voucher  File.     Make  your  journal  entry.     Deter- 
mine the  debit  by  rule  i8,  page  31;  determine  the  credit  by  rule  6,  page  11. 

No.  33. — April  25.  Mr.  Hastings  has  purchased  merchandise  from  Bernet  &  Craft, 
on  account. 

Compare  the  merchandise  received  with  the  bill  and  check  each  of  the  items.  Store 
the  merchandise.     Make  your  journal  entry,  and  place  the  bill  in  the  Invoice  File. 

No.  34. — April  26.  This  order  calls  for  a  sale  of  merchandise  to  H.  A.  Woodbury, 
on  account. 

Select  the  merchandise  called  for  and  check  the  items  on  the  order.  Make  out  the 
bill  and  verify  your  calculations.  Make  your  journal  entry,  and  place  the  bill  and 
merchandise  in  the  proper  receptacle.     Place  the  order  in  your  Voucher  File. 

No.  35. — April  27.  J.  M.  Hastings  requires  $75  for  his  own  use,  and  he  draws  the 
amount  from  the  business  by  check. 

Fill  out  the  stub  of  your  check  book,  then  make  the  check  and  deduct  the  amount 
from  the  balance  in  the  bank,  as  shown  on  the  stub  of  your  check  book.  Remove  the 
check  and  place  it  in  Cash  Paid  Out.  Make  your  journal  entry.  Determine  the  debit  by 
rule  14,  page  28;  determine  the  credit  by  rule  6,  page  11. 

When  mone}^  is  drawn  for  private  use,  the  check  should  be  made  payable  to  the  proprietor's  name. 
If  the  cash  were  drawn  for  use  in  the  business,  the  check  should  read,  Pay  to  the  order  of  Cash. 

No.  36. — April  28.  This  order  calls  for  a  sale  of  merchandise  to  T.  W.  Bowen  & 
Co.,  on  account. 

Make  the  bill  for  order  (No.  36),  selecting  the  goods  from  the  Store  Room  and  check- 
ing each  item  on  the  order.     Verify  your  calculations  and  make  the  proper  journal  entry. 

No.  37.- — -April  30.      Pay  drayage  bill  (No.  37)  with  check. 

Fill  out  the  stub,  write  the  check,  and  deduct  the  amount  from  the  bank  balance. 
(This  transaction  is  similar  to  No.  42,  page  27.)     Place  the  check  in  Cash  Paid  Out. 

No.  38. — April  30.  T.  W.  Bowen  &  Co.  have  given  their  note  (No.  38)  to  apply 
on  account. 

Determine  the  debit  by  rule  15,  page  29;  determine  the  credit  by  rule  11,  page  25. 
Place  the  note  in  Cash  Drawer. 

No.  39. — April  30.     Mr.  Hastings  has  sold  merchandise  to  H.  A.  Woodbury. 

Fill  order  (No.  39)  from  your  Store  Room,  checking  each  item-  from  the  order.  Make 
the  bill  and  verify  your  calculations.  Make  the  proper  journal  entry,  and  place  the  bill 
and  the  merchandise  in  Vouchers  for  Others.     Place  the  order  in  your  Voucher  File. 

No.  40. — April  30.  You  may  draw  a  check  to  your  own  order  for  the  amount  of 
your  salary. 

No.  41. — April  30.  Take  from  yotir  Cash  Drawer  all  currency  and  all  checks  made 
payable  to  the  order  of  J.  M.  Hastings.  I^eave  the  notes  payable  to  his  order  in  the  Cash 
Drawer.      They  are  not  cash.     Indorse  the  checks,  by  writing  across  the  back,  about  one 


62 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


and  one-half  inches  down  from  the  left  end  of  the  check,  Pay  to  the  order  of  Commercial 
Bank,  J.  M.  Hastings,  by  (Student's  Name),  Atty.      (See  form  below.) 

Form  of  Check,  Indorsed. 


Form  of  Deposit  Ticket. 


Commercial  Bank 


^^^ZA^^yi^.^^_ 


190^ 


Take  a  blank  deposit  ticket  and  write  opposite 
the  word  Currency  the  amount  of  bills  in  your 
Cash  Drawer,  and  under  Checks  write  the  amount 
of  each  individual  check  separately  on  the  deposit 
ticket. 

The  accompanying  illustration  represents  a 
deposit  ticket  properly  filled  out.  The  items 
are  different  from  those  on  your  deposit  ticket. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  63 

Place  the  currency,  checks  and  deposit  ticket  in  your  bank  pass  book,  and  present  to 
the  teller,  or  to  5^our  teacher  if  no  bank  is  used  in  connection  with  the  work.  See  that 
the  proper  amount  is  entered  in  the  bank  pass  book,  and  add  this  amount  to  the  balance 
in  the  Commercial  Bank,  as  shown  by  the  stub  of  your  check  book.  Leave  your  bank 
pass  book  at  the  bank  to  be  written  up. 

No.  42.— April  30.  THIRD  REPORT.  Prepare  your  report  blank,  showing  cash 
received,  cash  paid  out,  cash  on  hand  in  the  Commercial  Bank,  merchandise  sold,  and  such 
other  results  as  are  called  for  on  the  report  blank.  Hand  the  report,  together  with  your 
vouchers  and  journal-daybook,  to  your  teacher. 

No.  43. — April  30.  Draw  a  check  on  the  Commercial  Bank,  in  favor  of  your  teacher, 
for  the  amount  of  your  bank  balance,  and  give  the  check  to  him. 


POSTING. 

In  3^our  ledger,  at  the  top  of  page  i,  write  J.  M.  Hastings;  15  lines  below  write 
Merchandise .    At  the  top  of  page  2  write  Expense^  and  15  lines  below  write  Loss  and  Gain. 

These  accounts  make  a  section  of  the  ledger  containing  all  the  business  accounts  (see 
page  35),  or  accounts  showing  losses  or  gains;  the  Toss  and  Gain  account,  where  these 
gains  and  losses  are  gathered  under  one  head  (see  page  40);  and  the  Proprietor,  who 
receives  the  gain  from  the  business  or  sustains  the  loss,  should  there  be  one. 

On  page  3  of  your  ledger,  at  the  top,  write  Cash;  18  lines  below  write  Chas.  E.  Hayes; 
and  15  lines  below  this  write  Ellis  &  Rand.  At  the  top  of  page  4  write  T.  W.  Bowen  & 
Co.;   15  lines  below  write  H.  A.  Woodbiwy ;    and  15  lines  below  this  write  Bills  Receivable . 

These  accounts  make  a  section  of  your  ledger  containing  accounts  of  finance  (see  page 
36),  which  show  in  their  balances  resources  to  the  business  (see  page  37).  In  large 
business  houses  accounts  with  persons  owing  the  business  are  generally  kept  in  a  separate 
ledger,  called  the  "Customers'  Ledger"  or  "Accounts  Receivable  Ledger." 

At  the  top  of  page  5  write  Hatheway  &  Reynolds;    15  lines  below  write  Smith  & 
Dorothy;    and  15  lines  below  this  write  Geo.  C.  Cary.      At  the  top  of  page  6  write  L.  A. 
Wright  &  Co.;   15  lines  below  write  Grunsf eld  Bros.;  15  lines  below  this  write  Be  met  & 
Croft;  at  the  top  of  page  7  write  Bills  Payable. 

This  third  section  of  your  ledger  will  contain  all  accounts  of  finance,  which  show  in 
their  balances  a  liability  to  the  business. 

In  business  it  is,  of  coTorse,  not  practicable  to  write  the  names  of  all  ledger  accounts  before  posting, 
and  they  are  opened  in  the  ledger  in  the  order  in  which  they  appear  in  the  journal;  but  separate  sections 
of  the  ledger  should  be  taken  for  each  class  of  accounts. 

Post  your  jomnal  entries  (see  directions,  page  13).  Check  back  your  postings  (see 
directions,  page  26).  Take  a  trial  balance  of  your  ledger  balances.  If  the  trial  balance 
is  correct,  take  an  inventory  of  your  merchandise  from  the  cards  found  in  your  Store 
Room.  You  should  have  on  hand  the  following:  305  brls.  apples;  200  brls.  flour;  25  bu. 
barley;  675  bu.  corn;  800  bu.  oats;  1025  bu.  potatoes.  Find  the  value  of  these  goods, 
using  the  latest  cost  price  as  shown  by  your  invoices.  Make  statements  according  to 
forms  on  pages  35  and  37.     Close  your  ledger. 


64 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


STATEMENTS  OF   CUSTOMERS'   ACCOUNTS. 

An  important  feature  of  any  bookkeeper's  work  is  that  attention  to  customers' 
accounts  which  insures  prompt  payment  of  bills  as  they  fall  due.  In  order  to  call  the 
attention  of  customers  to  the  fact  that  payment  is  desired,  many  business  houses  send  a 
statement  whenever  a  bill  is  due;  r.^.,  if  John  Smith  &  Co.  bought  merchandise  billed  at 
$165,  Jan.  loth,  at  ten  days,  then  on  Jan.  20th,  or  perhaps  a  day  or  two  later,  a  statement 
like  the  following  would  be  sent  him. 


OLIO -^-~  J 


STiVFESfENT. 


tVour  place  here.) 


7.^^^  2-  ^  M' 


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fj  ACCOUNT 


With 


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K-'T^^^^ 


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In  the  ordinary  course  of  business,  however,  it  is  a  more  common  practice  to  send  each 
customer,  at  the  first  of  the  month,  a  statement  showing  the  debit  balance  of  his  account 
up  to  date,  whether  this  balance  is  due  or  not,  thus  calling  his  attention  to  his  indebted- 
ness and  enabling  him  to  compare  the  statement  with  your  account  in  his  ledger,  and 
note  any  difference  which  may  appear  between  his  books  and  your  own.  A  competent 
bookkeeper  will  have  his  statements  ready  to  send  out  the  first  of  the  month  as  most  of 
them  can  be  prepared  considerably  in  advance  of  that  date. 

Customers'  statements  are  prepared  entirely  from  the  ledger  accounts  of  customers, 
and  of  course  the  posting  must  be  completed  before  the  statements  can  be  made  out. 

You  may  now  prepare  statements  of  accounts  for  all  customers  who  owe  you  a  lialance. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


65 


Turn  to  Chas.   B.  Hayes'   account  in  your  ledger,   and  from  that   accoimt  prepare  a 
statement  like  the  following  form.      These  are  not  your  debit  amounts. 


s  -TAT  e:  ivi  e:  N 

T 

y^Z^^l^y  /.  190 

(Your  place  here.^                                                          ^__^ 

~^^^^^ 

In  Account  with    J^  ^^   HA^TDNOSp 
140    Elm    Street. 

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^^ 

TO  MDSE. 

A^.-r^ 

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, 

Prepare  similar  statements  for  all  others  who  owe  you  a  balance.  Place  them  in 
properly  addressed  envelopes  and  hand  to  your  teacher. 

Present  your  books  to  your  teacher  for  inspection,  after  having  carefully  examined 
them  yourself  to  see  that  all  rulings  are  correct  and  that  page  marks,  dates  and  transfer 
pages  have  not  been  omitted.  See  that  all  closing  entries  and  rulings  in  your  ledger  are 
in  red  ink,  and  that  all  transfers  are  in  black  ink. 

Do  not  allow  yourself  to  be  careless  in  these  small  matters;    they  are  more  important 
than  they  appear.     In  your  small  ledger  it  is  an  easy  matter  to  find  an  account,  even  if 
the  page  mark  is  not  in  the  journal,  but  in  business  where  the  ledger  sometimes  has 
looo  pages  the  omission  of  page  marks  causes  much  unnecessary  work. 
Com. — q 


66 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


April  Price  List. 


Apples  . 
Barley  . 
Corn  .  . 
Flour  . 
Oats  .  . 
Potatoes 


I 

I 

2 

3 

4 

5 

6 

7 

8 

9 

10 

II 

1-75 

1.80 

1.85 

1.90 

1^95 

2.00 

1.76 

1. 81 

1.86 

1. 91 

1.96 

.26 

•31 

•36 

.41 

.46 

•27 

•32 

•37 

.42 

•47 

.28 

•56 

•30 

•45 

•31 

.46 

■51 

.40 

.36 

•37 

•50 

.41 

4-50 

445 

4.40 

4^35 

4-30 

4-25 

4^49 

4.44 

4-39 

4^34 

4.29 

.26 

•52 

•37 

•51 

•36 

•31 

•42 

.46 

•45 

•32 

.41 

.28 

•32 

•36 

.40 

•44 

.48 

•39 

•33 

■37 

.41 

•45 

12 


13 


•77 

I. 

•33 

•32 

.48 

4- 

•50 

•39 

82 

38 

47 
43 
35 
30 


April  Price  List  (Continued). 


14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

Apples 

1.87 

1.92 

1.97 

1.78 

1.83 

1.88 

1^93 

1.98 

1.79 

1.84 

1.89 

1.94 

Barley 

•43 

.48 

•29 

•34 

•39 

•44 

•49 

•30 

•35 

.40 

•45 

•50 

Corn 

•33 

•43 

•53 

•39 

•49 

•44 

•34 

.48 

•38 

•52 

•42 1    ^35 

Flour 

4^38 

4^33 

4.28 

4-47 

4.42 

4-37 

4^32 

4.27 

4.46 

4.41 

4-36  4^31 

Oats 

•49 

•39 

•29 

•43 

•33 

•38 

.48 

•34 

•44 

•30 

.40     .47 

Potatoes 

•34 

•38 

•42 

.46 

•50 

•31 

•35 

•39 

•43 

•47 

•51 

•54 

QUESTIONS. 

1.  What  is  the  object  of  bookkeeping? 

2.  What  is  a  power  of  attorney?     When  is  it  given? 

3.  How  would  you  proceed  with  a  bill  of  merchandise  received,  before  writing  O.  K. 
upon  it  ? 

4.  How  would  you  show  that  the  bill  had  been  carried  to  the  proper  accounts? 

5.  Why  should  merchandise  sold  be  itemized  in  the  journal? 

6.  Why  is  it  unnecessary  to  itemize  merchandise  purchased  ? 

7.  Why  should  a  receipt  be  taken  when  cash  is  paid  for  any  purpose? 

8.  Is  a  receipted  bill,  or  a  receipt,  proof  that  a  bill  has  l)ecii  paid  ?    Give  your  reasons 
for  your  answer. 

9.  How  do  you  find  the  amount  of  cash  received  in  making  out  }'our  reports? 
10.   How  do  you  find  the  amount  of  cash  paid  out  ? 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  67 

1 1 .  How  do  you  find  the  amount  of  cash  on  hand  ? 

1 2 .  How  do  you  find  the  amount  of  merchandise  sold  ? 

13.  What  is  a  bank? 

14.  Why  is  it  customary  for  business  houses  to  keep  their  money  in  a  bank  instead 
of  in  their  own  safe  ? 

1 5 .  What  is  necessary  ta  be  done  before  opening  an  account  with  a  bank  ? 

16.  How  should  a  signature  be  written  in  the  signature  book  of  a  bank? 

17.  What  is  a  deposit  ticket  ?     When  and  how  is  it  prepared  ? 

18.  What  is  a  bank  pass  book,  and  who  makes  the  entries  in  this  book? 

19.  Where  and  when  should  the  depositor  make  a  record  of  a  deposit? 

20.  Why  is  no  entry  required  in    the    journal    when    a  deposit  is  made  in  the  bank  ? 

2 1 .  What  should  be  done  w4th  an  order  for  merchandise  when  it  is  received  ? 

22.  How  would  you  show  that  the  order  had  been  filled,  and  what  would  you  do  with 
it  after  it  had  been  filled  ? 

23.  Why  should  orders  for  merchandise  be  carefully  preserved? 

24.  What  is  the  meaning  of  a  purchase  or  a  sale  on  account  ? 

25.  When  terms  are  not  mentioned  on  an  invoice,  what  is  understood? 

26.  What  is  a  note  ? 

27.  When  is  a  note  called  a  bill  receivable,  and  when  a  bill  payable? 

28.  Why  is  a  check  regarded  as  cash  ? 

29.  Why  should  it  be  presented  immediately  at  the  bank? 

30.  Suppose  you  have  a  check,  how  would  you  proceed  to  get  the  money  called  for  by 
the  check  if  you  were  unknown  at  the  bank  ? 

3 1 .  Why  should  the  stub  of  a  check  book  be  filled  out  before  the  check  itself  is  written  ? 

32.  What  special  care  should  be  taken  in  filling  out  a  check,  and  what  is  the  conse- 
quence of  carelessness  in  this  respect  in  case  the  check  is  raised  ? 

33.  How  is  it  possible  to  determine  at  any  time  what  amount  remains  to  your  credit 
in  the  bank  ? 

34.  When  it  is  necessary  to  draw  a  check  for  private  use,  in  whose  name  should  the 
check  be  made  out  ? 

35.  When  cash  is  checked  out  for  use  in  the  business,   to  whose  order  should  the 
check  be  drawn  ? 

36.  Where  should  the  indorsement  of  a  check  appear? 

37.  Define  accounts  of  business.     Accounts  of  finance. 

38.  What  is  a  customers'  ledger? 

39.  What  is  the  object  of  checking  back  postings,  and  when  should  it  be  done? 

40.  What  is  an  inventory  and  when  is  it  taken  ? 

41.  What  prices  should  be  used  in  taking  an  inventory? 

42 .  Where  are  inventories  carried  in  the  ledger  when  that  book  is  to  be  closed  ? 

43.  What  is  the  object  of  sending  statements  of  accounts  to  customers,  and  when  is 
this  generally  done  ?    ' 

44.  How  often  should  a  bank  book  be  balanced,  and  who  attends  to  this  work  ? 


68 


MODERN    ILLUSTRATIVE    liOOKKEEPING. 


TEA,   COFFEE    AND    SPICE    BUSINESS. 

Books  Kept. — The  books  which  3'ou  will  keep  in  this  work  are  the  journal-daj^book, 
cash  book,  sales  book  and  ledger. 


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Th<>  C'asli  Book. — Cash  transactions  will  be  numerous  in  almost  any  business,  and 
from  this  fact  it  has  been  found  advisable  to  take  the  Cash  account  from  the  ledger  and 
place  it  in  a  book  called  the  "  Cash  Book,"  which  contains  on  its  left-hand  page  all  cash 
debits,  with  the  name  of  the  account  to  be  credited  in  the  left-hand  explanation  space, 
and  in  the  right-hand  explanation  space  a  brief  description  of  the  transaction.  The 
amount  is  entered  in  the  left-hand  money  column.  All  items  of  cash  paid  out  or  cash 
credits  are  entered  on  the  right-hand  page  of  the  cash  book,  with  the  name  of  the  account 
to  be  debited  in  the  left-hand  explanation  space,  and  a  brief  description  of  the  transaction 
in  the  right-hand  explanation  space.  The  amount  is  entered  in  the  left-hand  money 
column. 

Since  the  debit  of  the  cash  book  shows  all  cash  received,  and  the  credit  all  cash  paid 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


69 


out,  it  is  evident  that  the  difference  between  the  two  sides  of  the  cash  book  should  show 
at  any  time  the  amount  of  cash  on  hand. 

It  is  unnecessary  to  keep  a  Cash  account  in  the  ledger,  although  some  bookkeepers  do 
so,  carrying  the  total  of  the  left-hand  page  to  the  debit  side  of  Cash,  and  the  total  of  the 
right-hand  page  to  the  credit  side  of  Cash  in  the  ledger. 


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*  To  be  entered  in  red  ink. 


The  cash  book  should  be  balanced  at  frequent  intervals.  If  a  considerable  amount  of 
business  is  done  in  cash,  it  is  well  to  balance  the  cash  daily.  In  this  and  in  all  following 
sets,  the  Cash  account  will  be  kept  in  the  cash  book  only,  and  not  carried  into  the  ledger. 
Remember  the  cash  book  is  the  Cash  account  of  the  ledger,  therefore,  the  balance  of  the 
cash  book  must  be  carried  into  the  trial  balance  when  that  is  taken  from  the  ledger. 

Tlie  Sales  Book. — It  is  customary  in  business  to  place  all  sales  of  merchandise, 
whether  for  cash,  on  account,  or  for  a  note,  in  a  book  called  the  "Sales  Book."  The 
footing  of  this  book  will  at  any  time  show  the  total  sales  of  merchandise  to  date.  This 
book  does  away  with  a  long  Merchandise  account  in  the  ledger,  as  the  footing  of  the  sales 


70 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


book  is  carried  to  the  credit  of  Merchandise  in  the  ledger  at  the  end  of  each  month,  or  as 
often  as  may  be  desired. 

The  second  or  right-hand  money  cohimn  of  the  sales  book  contains  the  amounts  which 
are  to  be  charged  to  the  debit  of  the  respective  accounts,  and  all  discounts  and  allowances 
must  be  entered  in  the  first,  or  item,  column. 


Form  op  Sales  Book. 


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MODERN    ILLUSTRATIVE    BOOKKEEPING. 


71 


WORK    FOR  THE   STUDENT. 

No.  1. — May  I.  Being  offered  a  higher  salary,  and  considering  that  the  business 
affords  a  better  opportunity  for  advancement,  you  have  accepted  a  position  as  bookkeeper 
for  Henry  F.  Adams,  wholesale  dealer  in  Tea,  Coffee  and  Spices,  at  246  Main  St.,  your 
city,  at  a  salary  of  $75  per  month.  Mr.  Adams  will  do  all  the  buying  and  fix  all  selling 
prices  of  the  goods,  and  as  he  is  on  the  road  a  large  part  of  the  time,  will  give  you  a 
power  of  attorney  similar  to  the  one  you  received  from  Mr.  Hastings,  your  former 
employer.  File  the  power  of  attorney  after  filling  in  the  j^roper  names  in  the  blank 
spaces.  You  will  receive  all  goods,  verify  the  prices,  etc.,  attend  to  the  filling  of  all 
orders,  and  to  the  delivery  of  the  goods  sold,  and  have  full  charge  of  the  books  of  the 
business. 

No.  2. — May  I .  Ask  your  teacher  to  assign  you  a  price-list  from  the  numbered  lists 
on  pages  100  and  loi,  and  take  from  your  incoming  voucher  pad  the  cash  required  for 
Henry  F.  Adams'  investment. 

Make  an  entry  in  your  journal-daybook,  giving  a  description  of  the  conditions  under 
which  the  business  is  begun.  Do  not  extend  the  amount  of  cash  received  in  the  money 
column.     The  following  illustrates  the  form  of  your  journal-daybook  entry. 


/,  y^^- 


/^i 


^^<^^'Z^-£..J-^Z^i^'9-i^ 


It  is  usually  customary  in  commencing  business  to  write  in  the  journal-daybook  a 
brief  statement  of  the  conditions  under  which  the  business  was  commenced,  and  if  it  be  a 
partnership,  a  brief  summary  of  the  partners'  agreement.  This  record  is  made  in  the 
journal-daybook,  as  a  matter  of  convenience  only.  The  amount  is  not  extended  in  the 
money  column,  as  this  is  a  cash  transaction,  but  the  entry  therefor  is  made  in  the  cash  book. 

Cash  Book  Eutry. — Enter  the  amount  of  cash  received  in  your  cash  book.  The 
following  illustrates  the  form  of  the  entry,  but  the  amount  and  explanation  are  different. 


-'^.-'7-Z'^ 


fZ 


£>  O 


72 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


The  investment  is  entered  in  the  first  money  column  of  the  debit  or  left-hand  page  of 
the  cash  book.  The  left-hand  explanation  space  contains  the  name  of  the  account  to  be 
credited,  while  the  right-hand  explanation  space  contains  a  brief  description  of  the 
transaction.  The  extra  vertical  column  at  the  left  is  for  the  page  of  the  ledger  when  the 
item  is  posted.     Place  the  cash  in  3'our  Cash  Drawer. 

No.  3. — May  i  .  Pay  one  month's  rent  in  advance  to,  and  take  a  receipt  from,  the  Na- 
tional Real  Estate  Co.,  which  owns  the  building  at  246  Main  Street. 

Make  an  entry  for  this  transaction  on  the  credit  or  right-hand  page  of  the  cash  book. 
The  following  illustrates  the  form  of  cash  book  entry,  but  the  amount  is  different. 


f- 


/ 


i-^ig; 


-^^-,=^-^2^^- 


-yyZ'gtyi^ 


f 


£^ 


The  left-hand  explanation  space  contains  the  name  of  the  account  to  be  debited,  while 
the  right-hand  explanation  space  gives  a  brief  description  of  the  transaction.  All  cash 
received  or  paid  out  must  be  entered  in  the  cash  book. 

No.  4, — May  2.  You  have  purchased  of  the  Upton  Coal  Co.,  5  tons  coal  at  $5.25, 
amounting  to  $26.25. 

This  is  a  cash  transaction  and  the  entry  will  be  made  on  the  credit  side  of  the  cash 
book,  since  cash  is  paid  out.  The  following  shows  the  form  of  entry,  but  the  amount  is 
different. 


z- 


No.  5. — May  2.  You  have  received  an  invoice  of  merchandise  from  West,  Stone  & 
Co.,  New  York. 

In  this  series  of  transactions  you  will  not  receive  cards  to  represent  merchandise,  but 
will  assume  that  the  merchandise  has  been  received,  and  will  check  each  item  on  the 
invoice  after  verifying  the  calculations.  If  found  to  be  correct,  O.  K.  the  invoice  and 
place  it  in  your  Invoice  File.  This  transaction  calls  for  an  entry  in  the  journal  (see 
rule  7,  page  12). 

No.  <>. — May  2.  Invoice  No.  6  has  been  purchased  of  1,.  Hennes  &  Co.,  New  York, 
by  Mr.  Adams,  who  has  agreed  to  give  a  note  at  60  days  in  payment. 

Verify  the  calculations.  Mr.  Adams'  O.  K.  is  on  the  invoice,  which  you  may  place 
in  your  Invoice  File.  Write  the  note  required  by  the  transaction  and  place  it  in  Bills 
Payable  File.     Do  not  forget  to  fill  out  the  stub  of  yotir  note  book. 

In  this  transaction  yoti  will  debit  Merchandise  in  the  journal  and  credit  L.  I  fen  ties  & 

Co.  for  the  amount  of  the  invoice,  and  debit  A.  Hennes  &  Co.  and  credit  Bills  J\iyable  for 

the  amount  of  the  note  given  them  in  payment. 

If  T/.  Hennes  &  Co.  were  not  a  house  from  which  Mr.  Adams  was  making  regular  purchases  on 
account,  it  would  be  unnecessary  to  carry  this  invoice  to  Iheir  personal  account,  as  the  journal  enlrv, 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


73 


Mdse.,  Dr.,  and  Bills  Payable.  Or.,  would  be  sufficient  to  record  the  transaction  (see  No.  54,  page  30); 
but  as  Mr.  Adams  is  piurchasing  of  L.  Hennes  &  Co.  on  account,  it  is  advisable  that  their  account  in  your 
ledger  should  show  all  transactions  made  with  them,  hence  this  account  is  carried  to  their  credit  in  the 
ledger,  and  they  are  immediately  debited  for  the  note  sent  in  payment. 

:N"o.  7. — May  2.  You  may  deposit  in  the  Commercial  Bank  all  yotir  cash,  except  $200, 
which  you  will  retain  in  the  Cash  Drawer.  Make  out  a  deposit  slip  and  hand  it  to  the 
bank  teller  with  the  currency  and  bank  pass  book.  Do  not  fail  to  enter  the  deposit  on  the 
stub  of  your  check  book. 

No.  8. — May  3.  This  invoice  of  merchandise  has  been  purchased  of  Shields  Bros., 
City,  for  cash,  and  you  receive  a  discount  of  2^. 

Verify  the  calculations,  see  that  your  discount  is  right,  and  if  the  bill  is  correct  make 
a  journal  entry  debiting  Mdse.  and  crediting  Shields  Bros.  Write  a  check  for  the  amount 
called  for.  See  that  the  stub  of  your  check  book  is  properly  filled  out  before  you  detach 
the  check  from  the  book.  Deduct  the  amount  of  the  check  from  your  balance  in  the 
bank.  Place  the  check  in  Cash  Paid  Out,  and  place  the  invoice  in  your  Voucher  File. 
This  is  a  cash  transaction  and  should  be  entered  in  your  cash  book.  Write  on  the  credit 
or  right-hand  side  of  the  cash  book  the  amount,  and  in  the  first  explanation  space, 
Shields  Bros. ,  which  is  the  name  of  the  account  debited.  In  the  second  explanation  space 
write  ifivoice  of  May  j. 

No.  9. — May  3.     Order  No.  9  calls  for  a  sale  of  merchandise  on  accotmt. 

Make  out  the  bill,  checking  each  item  on  the  order  as  soon  as  entered  on  the  bill. 
Verify  your  calculations  and  be  sure  the  bill  is  right.  In  this  month's  work  all  sales  of 
merchandise  on  account  will  be  entered  in  the  sales  book.  You  will  therefore  enter  the 
same  items  and  prices  on  page  i  of  this  book.  The  following  is  the  form  of  sales  book 
entry;   the  amounts  are  different. 


kJ,/^^- 


',  (^  a^-z:?:^. 


2-/ 


z 

3 


// 


^6 


3^ 


4^^ 


/3  ct 


Z 


^/ 


All  merchandise  sold  should  be  entered  in  the  sales  book. 

Fold  the  order  and  place  it  in  your  Voucher  File;  place  the  bill  in  Vouchers  for  Others. 

No.  10. — May  4.  You  have  received  an  order  calling  for  goods  at  a  cash  price, 
which  is  3^  less  than  your  regular  credit  price. 

Make  out  the  bill  and  deduct  3'*  discount  from  the  gross  amount.  Use  bill  No.  8  in 
your  Voucher  File  as  a  model.     The  net  amount  of  the  bill  shotild  agree  with  check 


74 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


No.  lo,  $6ii.io,  which  you  will  receive  from  F.  C.  Tennej^  in  your  Incoming  Vouchers. 
Receipt  the  bill  and  place  it  in  A'ouchers  for  Others.  Place  the  check  in  ^-our  Cash 
Drawer.  Enter  the  sale  in  your  sales  book,  one  line  below  your  last  entry,  debiting  F. 
C.  Tenney.  Place  the  date  in  the  middle  of  the  line,  as  in  the  journal.  All  gross 
amounts  and  discounts  appear  in  the  first  money  column  only,  net  amovmts  being  carried 
into  the  second  money  column. 

The  following  shows  the  form  of  your  sales  book  to  date,  the  names  and  amounts  being 
different. 


K^,y^^- 


'f' 


(^ ,  y^;-y'^^-rzyL<'^2^'i:Z''4^^  ^  ^^-^t^iCj,  //o. 


\3  o  CP  '^ 


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3^ 


u  c 


^^ 


■  c 


jTO 


/3  f 


ZJ  J 


^7 


ff 


zz^ 


(P  / 


Enter  the  cash  in  your  cash  book,  giving  F.  C.  Tenney  credit  for  the  net  amount  of 
the  bill,  as  shown  by  his  check  No.  lo,  and  in  explanation  space  write   "  invoice  S.  /?." 

Many  bookkeepers  in  making  cash  sales  enter  the  sale  in  the  sales  book  as  usual,  but  do  not  post  to 
the  debit  of  the  person  to  whom  the  sale  is  made,  placinti^  a  check  mark  atjainst  his  name.  Thev  enter 
the  cash  on  the  debit  side  of  the  cash  book,  with  the  name  of  the  person  or  the  word  "  merchandise,"  but 
do  not  post  it  from  that  book  to  the  credit  of  the  person,  placing  instead  a  check  mark  against  his  name 
in  the  folio  column  of  the  cash  book.  Tliis  method  of  handling  cash  transactions  has  it  advantages,  as 
it  saves  the  two  postings  to  the  ledger,  which  offset  each  other.  The  footing  of  the  debit  side  of  the  cash 
book  will  show  the  de])it  of  cash,  and  the  footing  of  the  total  coiunni  of  the  sales  book  \\ill  slunv  the 
credit  of  merchandise,  so  that  the  proper  debit  and  credit  will  appear,  even  though  the  perst)n  wlio  ma(k> 
the  purchase  is  not  debited  with  the  purchase  and  credited  with  the  payment. 

Many  business  houses,  however,  wish  to  know  just  how  much  business  they  have  done  with  each 
customer,  and  this  can  only  be  shown  by  charging  the  customer  for  cash  sales  the  same  as  for  .sales  on 
account.     When  this  is  done  his  ledger  account  shows  at  a  glance  just  how  nuuh  l)usiness  he  is  doing 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  75 

with  the  house  each  month,  and  this  information  is  usually  considered  of  much  more  value  than  the 
saving  of  time  made  by  the  bookkeeper  when  he  omits  to  post  such  items. 

In  this  and  the  following  month's  work,  cash  sales,  except  for  occasional  small  pur- 
chases made  by  individuals  who  are  not  regular  customers,  will  be  entered  in  the  sales 
book  and  charged  to  the  persons  making  them,  while  the  payments  will  be  entered  in  the 
cash  book  and  credited  to  the  persons  making  them.  In  this  way  the  ledger  accounts  of 
all  regular  customers  of  the  business  will  show  the  amount  of  purchases  they  have  made 
during  the  continuance  of  the  business. 

^o.  11. — May  4.     This  order  is  for  merchandise  on  account. 

Make  out  the  bill  and  check  the  items  on  the  order.  Enter  the  transaction  in  the 
sales  book  and  place  the  order  in  your  Voucher  File.      Be  sure  the  amount  is  correct. 

No.  12. — May  4.     This  bill  is  for  books  and  stationery  to  be  used  in  the  office. 

Verify  the  calctilations,  O.  K.  the  bill,  and  write  a  check  for  the  amount.  Enter  in 
the  cash  book.  Do  not  fail  to  deduct  the  amount  of  the  check  from  your  bank  balance. 
This  is  a  common  error  and  causes  much  trouble  in  balancing  the  bank  account  at  the 
end  of  the  month. 

No.  13. — May  5.  This  bill  is  for  office  furniture  and  a  safe,  which  Mr.  Adams  has 
purchased  for  permanent  use  in  the  business,  and  an  account  will  be  kept  in  the  ledger 
with  "  Furniture  and  Fixtures." 

Fill  out  a  check  for  the  amount  and  make  the  proper  entry  in  the  cash  book,  debiting 
Furniture  and  Fixtures  instead  of  Expense. 

No  14. — May  5.  Mr.  Adams,  has  decided  to  purchase  the  building  and  lot  at  246 
Main  St.  of  the  National  Real  Estate  Co.  Their  price  is  $12000  cash.  Not  having 
this  amount  on  hand,  Mr.  Adams  has  arranged  with  James  D.  Branson  to  indorse  a  note 
for  him  so  that  he  may  borrow  $5000  of  the  Commercial  Bank.  The  following  is  the 
form  of  note  required. 


(Yoar  place  here.) 


J^^^y  y^  /.90 


V  *  v"»    f^jt»\,c  not  ^.^  ^j»^ 


/g^^^-;^-^  -r^>  <=><:V~-^^^WL-<^^^ 


J7^..--f^^^.^-^.^^^<r:/^'7^ " ^JrM/>/f7, 


'aytJ 


K*v«ncV  H  Wl«stn*rr.]7B  Fulton  SlN  Y  ' ^  - ^ 


Indorsing  a  note  consists  in  writing  one's  name  on  the  back  of  the  note,  and  the  person 
who  thus  writes  his  name  becomes  responsible  for  the  payment  of  the  note  in  case  the 
maker  fails  to  make  payment  when  it  becomes  due.      In  the  case  of  the  note  given  above, 


76  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

the  note  is  made  payable  to  the  order  of  the  indorser,  who  writes  his  name  upon  the  back 
and  gives  it  to  H.  F.  Adams.  Adams  takes  the  note  to  the  bank,  receives  the  money, 
and  will  pay  the  note  when  due.  In  case  he  should  fail  to  do  this,  then  James  D.  Branson 
would  be  called  upon  to  pay  it. 

Write  this  note,  using  the  model  form  on  page  75,  but  make  it  payable  at  Commercial 
Bank.  Take  the  note  to  your  teacher,  who  will  indorse  it  for  James  D.  Branson,  if  it  is 
correct;  then  take  it  to  the  bank  for  discount.  The  note  is  due  Sept.  5th,  which  is  123 
daj^s  after  May  5th,  the  date  of  discount. 

Bank  discount  is  found  by  taking  the  simple  interest  on  the  face  of  the  note  for  the 
time  in  days  from  the  date  of  discount  to  the  date  of  maturity;  therefore,  you  may  find 
the  interest  on  $5000  at  6  /  for  123  days,  which  is  $ixx.xo.  Subtract  this  amount  from 
$5000,  and  the  remainder,  $489x.xo,  is  the  net  proceeds  or  amount  to  be  placed  to  your 
credit. 

HOW  TO  CALCULATE  SIMPLE  INTEREST  AND  BANK  DISCOUNT. 
Bank  discount  is  the  simple  interest  on  the  face  of  commercial  paper  for  its  unexpired  time;  that  is, 
from  the  date  the  paper  is  discounted  to  the  day  upon  which  it  becomes  due.  In  this  work  the  exact  nmnber 
of  cays  between  these  two  dates  will  be  used  in  all  calculations  of  bank  discount.  For  instance,  a  note  dated 
May  ist  at  four  months  would  be  due  Sept.  ist  of  the  same  year;  but  most  banks  discounting  such  paper 
for  tho  full  time  would  not  calculate  the  interest  on  its  face  for  fom  months  (120  days),  but  would  take 
the  exact  number  of  days  between  May  ist  and  Sept.  ist  (123  days).  This  nnist  be  remembered  in  all 
calculations  of  bank  discount.  First  find  the  date  the  note  becomes  due;  next  find  the  number  of  days  to 
elapse  from  the  day  of  discount  to  the  day  of  maturity,  and  then  calculate  the  simple  interest  on  tlie  face 
of  the  note  for  this  number  of  days  at  the  rate  of  discount  given,  and  you  have  the  bank  discount. 

The  method  of  counting  time  for  discounting  notes  varies  in  different  banks,  and  often  in  the  same  bank.  Some  banks 
count  months  for  the  full  number  of  months,  and  days  for  the  fraction  of  a  mouth;  others  count  the  actual  number  of  daj's; 
while  some  few  count  one  day  more  than  the  actual  number  of  days. 

If  you  have  no  special  method  of  calculating  simple  interest,  you  may  use  the  following  rule: 

-Rule.—Firs^,  find  one-thousandth  of  the  principal,  or  face  of  the  paper,  by  removing  the 
decimal  point  three  places  to  the  left,  then  multiply  by  the  number  of  days  from  the  date  of  dis- 
count  to  the  date  of  maturity,  and  divide  by  6.  The  result  will  be  the  bank  discoiuit  or  simple 
interest  at  6%.  If  any  other  rate  than  6fo  be  required,  divide  this  result  by  6,  thus  obtaining 
the  interest  at  ifo,  and  multiply  by  the  rate  required. 

The  above  rule  is  based  on  the  following  reasoning. 

The  interest  on  one  dollar  for  i  year       at  36,1;     36^ 
"  "  <<      "         "        "2  months  "     "         6^ 

"  "  "       "         "        "  10  daj'S       "     "         i^ 

"  "  "       "  "        "     I  day  "     "  I  mill. 

But  I  mill  is  one-thousandth  of  a  dollar;  therefore,  it  is  evident,  according  to  this  reasoning,  that  one 
dollar  at  2,^%  will  double  itself  in  1000  days.  If  this  is  true  of  one  dollar,  it  is  true  of  any  number  of 
dollars,  and  if  we  take  one-thousandth  of  any  principal,  no  matter  what  it  may  be,  we  shall  have  the 
interest  on  that  principal  for  one  day  at  36;.  To  find  the  interest  for  any  number  of  days,  it  is  only 
necessary  to  multiply  the  interest  for  one  day,  or  one-thousandth  of  the  principal,  by  the  number  of 
days,  and  we  have  the  interest  on  that  principal  for  the  nmnber  of  days  given  at  36;.  Dividing  this 
result  by  6,  we  get  the  result  at  6',;  dividing  it  by  4,  would  give  us  the  interest  at  9',;  or  diviiliug  by  9 
would  give  us  the  interest  at  4';',  etc.     When  no  rate  of  interest  is  mentioned,  6';  is  understood. 

Discount  Mcnioi-aiMliiiu. — Take  a  discount  nicmoraiuluni  and  lill  it  out  properly. 
Supply  the  items  from  Mr.  Adams'  note.  Pin  the  memorandum  and  the  note  together,  and 
hand  them  with  your  bank  pass  book  to  the  l)ank  teller,  who  will  place  the  amount  to  your 
credit  if  you  have  calculated  the  discount  and  the  net  proceeds  correctly. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


77 


The  following  is  a  form  of  memorandum  which  is  in  use.    The  name  and  amounts  are 
not  the  same  as  appear  in  your  memorandum. 


Form  op  Discount  Memorandum. 


DISCOUNT   MEMORANDUM. 


C-r:^^^  /     /O'ff- 


DlSCOnNTED  FOR    ^t    ^ 


C-'T^^ 


h^^^ 


Face  ^  ^ /P-:f^-ff  .^^  int. 


.  Total  . 


ni«r  fffe/^  4^^~rr.,, 


Proceeds.     .2.  g7i  <T  -5  ^  "f 


The  student  will  fill  oat  this  blank  and  pin  to  the 
Note  before  presenting  it  at  the  bank. 


In  case  no  bank  is  conducted  with,  this  work,  you  may  place  the  note  and  discount  slip  in  Bills  Pa}'- 
able  File,  and  enter  the  amount  of  the  proceeds  on  the  left-hand  page  of  your  bank  pass  book,  as  shown 


in  the  following  illustration. 


/yc^-tz^ 


£C//7Z.^ 


"  ^T^ca^^-^^^i^'e^^-Zi^--^^^ 


4//y^ 


jr^ 


After  the  amount  has  been  entered  in  your  pass  book,  place  the  net  proceeds  upon  the 
left-hand  stub  of  the  check  book,  as  shown  in  the  following  illustration. 


■/' 


,/>^^^^ 


/ 


^i^fy 


-(> 


Add  the  amount  $4897.50  to  the  amount  now  on  deposit. 


Cash  Book  Entry. — Make  an  entry  on  the  debit  side  of  the  cash  book  for  the  face  of 
the  note,  $5000.     The  following  illustrates  the  form  of  your  entry. 


yV^^^:^^ 


^JT 


-^..J^-^, 


By  making  an  entry  on  the  debit  side  of  the  cash  book  yoit  debit  Cas/i  and  credit 
Bz/ls  Payable. 


78  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

Make  an  entry  on  the  credit  side  of  the  cash  book  for  the  amount  of  the  discount, 
$102.50.     The  following  illustrates  the  form  of  your  entry. 


^ 


^jT 


<=.Z2i^^^i'C'tp-i>c^'z,^^^^  J4<=><.c:^'(jU-^gi-.''9'i.d-^^ 


/  G  Z 


^£> 


By  making  an  entry  on  the  credit  side  of  the  cash  book  you  credit  Cash  and  debit 
Disco  2  int. 

The  bank  really  gave  3^ou  only  $4897.50,  but  you  can  readily  see  that  if  the  bank  had 
given  you  $5000,  you  would  have  been  required  to  take  from  the  $5000  the  sum  of  $102.50 
and  pay  it  to  the  bank  for  discount;  and  this  is  the  principle  upon  which  the  cash  book 
entries  are  made. 

Rule  19. — DiscousT  is  debited  when  it  is  allowed  to  other  persons,  or  when  it  is  paid  to 
the  bank  for  cashing  a  7iote  or  draft  before  it  is  due. 

It  is  evident  that  the  accounts  affected  by  the  transaction  in  the  above  example  are  Cash,  since  cash 
has  been  received  b}^  the  business;  Discount,  since  discount  has  been  allowed  the  bank  for  cashing  the 
note  123  days  before  it  is  due;  and  Bills  Payable,  since  Mr.  Adams  has  given  a  note  payable  in  four 
months.  It  is  evident  that  Cash  should  be  debited,  since  cash  has  been  received  (see  rule  3),  and  that 
Bills  Payable  should  be  credited,  since  a  note  has  been  issued  (see  rule  16).  Discount  has  cost  the  busi- 
ness value,  since  3'ou  have  allowed  the  bank  $102.50  for  cashing  a  note  before  it  is  due;  therefore, 
Discount  .should  be  debited  (see  rule  19). 

If  the  entries  were  made  in  the  journal,  Cash  and  Discount  would  be  debited  and  Bills  Payable 
credited,  according  to  the  following  form. 

Cash,  4897-50 

Discount  102.50 

Bills  Payable  5000.00 

No.  15. — May  5.  You  have  received  from  the  National  Real  Estate  Company  the 
deed  of  the  building  and  lot  No.  246  Main  St. 

Write  a  check  for  the  amount  called  for  in  the  deed.     In  this  transaction  real  estate 

has  cost  the  business  value,  and  therefore  Real  Estate  should  be  debited.    The  Real  Estate 

account  is  subject  to  the  same  rules  as  the  Merchandise  account. 

A  deed  is  always  received  when  real  estate  is  purchased,  since  the  title  to  real  estate  is  shown  by  this 
document.  The  document  should  be  recorded  as  soon  as  it  is  received,  since  the  seller  of  the  real  estate 
might  dispose  of  it  to  another  party,  giving  a  second  deed,  and  in  such  a  case  the  deed  first  recorded 
would  ]je  held,  at  law,  a  good  title  to  the  property. 

Rule  20. — Debit  Real  Est  at  k  when  purchased,  and  for  all  anwnnts  paid  for  its 
improvement  and  permanent  repairs. 

No.  1<>. — May  6.  This  invoice  has  been  purchased  of  the  E.  W'esten  Tea  &  Spice 
Co.  by  Mr.  Adams. 

Verify  the  calculations  and  file  the  invoice,  making  the  proper  entry  in  your  joinnal. 

No.  1  7. — May  6.     This  order  is  accompanied  by  a  note  for  $500  to  apply  on  account. 

Make  out  the  bill  and  check  each  item  on  the  order.  Enter  in  tlic  sales  book  as  a  sale 
on  account,  making  no  mention  of  the  note  for  $500  received  with  the  order.  In  \-onr 
journal  make  the  proper  entry  for  the  note.  What  account  sliould  be  debited  ?  What 
account  should  be  credited  ?     Place  the  note  in  your  Cash  Drawer. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


79 


Jfo.  18. — May  8.  Take  from  your  Cash  Drawer  the  note  received  from  A.  A.  Knowles 
&  Co.,  and  prepare  a  discount  memorandum.  Calculate  the  discount  on  the  note  from 
May  8th  to  the  date  of  maturity  (58  days).  The  discount  on  $500  for  58  days  at  6 >'  is 
$4.x3.  (For  method  of  calculating  discount,  see  page  76.)  Make  a  discount  memoran- 
dum and  attach  it  to  the  note;  take  the  note  to  the  bank  teller,  and  have  the  net  proceeds 
entered  in  your  bank  pass  book.  Enter  the  amount  on  the  stub  of  your  check  book,  as 
explained  in  No.  14,  and  add  the  amount  to  your  bank  balance.  Make  an  entry  on  the 
debit  side  of  the  cash  book  for  the  face  of  the  note  ($500),  as  in  transaction  No.  14. 
The  following  illustrates  the  form  of  your  entry,  though  the  amount  and  explanation  are 
different. 


/<r 


u^-^^r 


(:^^^^^^^2^.'^:^-'?^^^'^zi€^<^-z:>;' 


-^, 


Make  an  entry  on  the  credit  side  of  the  cash  book  for  the  amount  of  the  discount. 
The  following  illustrates  the  form  of  3'our  entrj',  but  the  amount  and  explanation  are 
different. 


/f 


c^:<^i^l.,<:i-€>ty'-C€yyz.^ 


CL'■/^tL^c■■■^■^yy7'^^€>^^^ 


A^r^-z^, 


y^  A^f 


In  case  there  is  no  bank,  enter  the  proceeds  in  your  bank  pass  book  (see  model  and 
transaction  No.  14,  page  77),  and  place  the  note  in  Vouchers  for  Others. 


Xo.  10. — May  8.      Make  out  the  bill,  checking  the  items  on  the  order, 
calculations  and  make  the  proper  entry. 


Verif}^  your 


No.  20. — May  8.  Take  from  your  Cash  Drawer  F.  C.  Tenney's  check  in  your  favor, 
and  enter  it  upon  a  deposit  ticket.  Indorse  the  check  properly  (see  illustration,  page  62), 
place  the  deposit  slip  with  the  check  in  your  bank  pass  book,  and  have  the  amount 
entered  at  the  bank.  Enter  the  amount  on  the  stub  of  your  check  book  and  add  to  j'oiu: 
deposit.      Make  no  entry  in  the  cash  book. 

No.  21.— May  8.     FOURTH  REPORT. 

Fill  out  the  report  blank,  answering  the  first  five  questions.  Balance  your  cash  book 
(see  model,  pages  68  and  69)  and  see  if  the  amount  agrees  with  your  report  and  also  with 
your  bank  balance  plus  the  amount  in  your  Cash  Drawer,  if  an3^  Hand  in  j^our  cash 
book,  journal,  sales  book  and  also  all  vouchers  for  inspection. 

No.  22. — May  9.  The  invoice  of  April  30th  received  from  West,  Stone  &  Co.  must 
be  paid  to-day,  if  you  desire  to  take  advantage  of  the  3^0  discount  for  paj-ment  in  10  daj's. 

Take  the  invoice  from  you  Invoice  File  and  calculate  the  discount  on  the  amount, 
$1693.50,  at  3^^,  which  is  $5x.xx.  Deduct  this  amount  from  $1693.50  and  draw  a  check 
for  the  net  amount  of  the  bill.     On  the  stub  of  the  check  show  the  amount  of  the  bill  and 


80 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


the  discount,  as  well  as  the  net  amount  shown  by  the  check  itself.     You  have  paid  West, 
Stone  &  Co.  the  entire  bill  of  $1693.50,  so  you  nia}^  enter  on  the  credit  side  of  your  cash 


book  the  following. 


/ 


'Cfj 


se 


But  West,  Stone  &  Co.  have  allowed  jou  $50.81  discoimt  for  paying  the  bill  within 
10  days,  which  is  the  same  as  if  you  had  given  them  $1693.50  in  cash  and  they  had 
counted  out  $50.81  of  this  cash  and  handed  it  back  to  a^ou  as  discount.  Bearing  this  in 
mind,  you  will  see  that  on  the  debit  side  of  the  cash  book  should  appear  the  following 
entry. 


^  f 


^/l^,U^^.:A^.:^^C^.^-^C^:^-Z^'^^  ^^ 


S£> 


/"/ 


Merchandise  Discount  is  credited  because  it  has  produced  value  to  the  business,  a  bill 
of  $1693.50  being  settled  for  $50.81  less  than  its  face. 

Rule  21. — Merchandise  Discount  is  credited  when  it  is  allowed  the  business  by  other 
persons  for  the  payment  of  a  bill  within  a  certain  time. 

A  distinction  is  made  between  discount  on  notes  and  discount  on  invoices  of  merchandise.  The 
former  is  called  "Discount"  simply,  while  the  latter  is  designated  as  "Merchandise  Discount,"  or 
"Commercial  Discount."  The  two  kinds  of  discounts  are  of  entirel}- different  characters,  and  should 
never  Ise  charged  to  the  same  account. 

In  the  payment  of  bills  on  which  commercial  (merchandise)  discounts  are  allowed,  it  is  usually 
customary  to  have  a  special  column  in  the  cash  book  in  which  to  enter  the  discount. 

No.  2.*5. — May  9.  This  order  calls  for  your  lowest  cash  discount.  Make  out  a  bill  at 
the  regular  prices,  and  opposite  Terms  write.  Cash  jr'c.  Enter  the  sale  in  the  sales  book. 
Do  not  deduct  the  3'^  discount.  You  have  not  yet  received  your  cash;  therefore,  charge 
Fletcher  Bros,  with  the  full  amount,  and  if  the^^  pay  the  bill  within  two  or  three  days, 
allow  them  the  discount,  as  it  is  customary  to  consider  such  sales  the  same  as  cash. 

Xo.  24. — May  id.    This  purchase  has  been  made  of  Shields  Bros. ,  City,  by  Mr.  Adams. 
Verif}^  the  calculations,  place  the  invoice  on  file,  and  make  the  proper  entry. 

:No.  25. — May  10.  The  goods  delivered  to  Fletcher  Bros.,  May  gtli,  have  been  paid 
for,  less  3^^  discount  allowed  for  cash. 

The  face  of  the  bill  :s  $728.50.  Three  per  cent  of  $728.50  is  $2x.xx.  The  bill  has 
been  paid  iii  full.  Make  an  entry  on  the  debit  side  of  the  cash  ])ook  for  the  full  amount 
of  the  bill  ($728.50),  y^xiimg  Fletcher  Bros,  in  the  explanation  colunui.  Make  an  entry 
on  the  credit  side  of  the  cash  book  for  the  amount  of  discount,  writing  Merchandise 
Discount  in  the  explanation  column.  This  transaction  resembles  No.  22,  but  the  conditions 
are  reversed.  You  receive  cash  and  allow  merchandise  discount,  instead  of  j^aying  cash 
and  having  merchandise  discount  allowed  yon. 

Ilulc  22. — Merchandise  Discount  is  debited  when  alloivcd  to  other  persons  for  thi 
hayment  of  a  bill  within  a  certain  time. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


81 


]S-o.  26. — May  ii.  Dickson  &  Young  hand  you  this  amount  on  acct.,  $200  in 
currency.     Place  the  bills  in  your  Cash  Drawer,  give  a  receipt,  and  make  the  proper  entry. 

No.  27. — May  ii.  Deposit  $200  currency  and  the  check  of  Fletcher  Bros,  in  Com- 
mercial Bank. 

Make  a  deposit  ticket,  placing  $200  opposite  Currency,  and  the  amount  of  the  check 
opposite  Checks.  Take  the  ticket  with  the  cash  and  the  check  to  the  bank,  and  have  the 
amount  placed  to  j^our  credit.  Do  not  forget  to  add  this  amount  to  the  balance  on 
deposit,  as  shown  on  the  stub  of  your  check  book. 

No.  28. — May  12.  Make  out  the  bill  and  check  each  item  from  the  order.  File  the 
order  and  make  the  proper  entry. 

Form  of  Acknowledgment  of  Remittance. 


WESTERN  office;    K^  ^# 

334  DEARBORN  ST.  CHICAGO.  I  LL 


~0^ 


i^ 


Gentlemen : 


^^^ 


^ 


Your  favor  of y/iC-fPE-^/i? is  at  hand,    enclosing 


T 


check  for  $ Z'^^., 


y<f 


^..<^,^y^::^^<:^^ 


^Or^S-^ 


Z=^^:^22.=:i^ii2:2= 


L-^ 


/  KP 


We  have  placed  this  amount  to  your  credit,  and   awaiting  your 
further  orders,  we  remain. 

Yours  truly. 


WILLIAMS  &  ROGERS. 


Com. — 6 


82  MODERN    ILLUSTRATIVE    IJOOKKEEPIXG. 

No.  21). — May  14.     H.  F.  Adams  draws  $100  for  private  use. 

Make  a  check  payable  to  the  order  of  H.  F.  Adams,  entering  the  proper  explanation 
on  the  stub  and  deducting  the  amount  from  the  bank  balance.  Make  the  proper  entry. 
Get  the  cash  from  the  bank,  but  do  not  put  it  in  the  Cash  Drawer,  as  it  is  not  for  the 
business  but  for  Adams'  private  use.  As  this  $100  is  not  used  in  the  business  you  may 
hand  it  to  j-our  teacher. 

No.30.  — May  14.  WTien  Mr.  Adams  bought  the  building  ^24.6  Main  St.,  it  was 
insured  by  the  Equitable  Fire  Insurance  Company  for  $Sooo.  The  policy.  No.  27614, 
expired  to-day,  and  you  may  write  a  check  for  $80  to  pay  for  a  new  policy  for  the  coming 
3''ear.  Do  not  fail  to  fill  the  stub  and  deduct  the  amount  from  your  bank  balance.  ]\Iake 
the  proper  entry. 

In  case  a  large  amount  of  insurance  is  carried,  it  may  be  advisable  to  open  an  Insurance  account 
instead  of  carrying  the  cost  of  insm-ance  to  the  Expense  account,  but  in  the  ordinary  course  of  business 
it  may  very  consistently  be  carried  to  the  Expense  account,  since  there  is  no  return  from  it. 

No.  31. — May  15.  Make  a  bill,  with  the  terms  called  for  in  the  order.  Check  each 
item.     Place  the  order  on  file  and  make  the  proper  entry. 

No.  32. — May  15.  This  check  is  received  on  account.  Write  an  acknowledgment  of 
the  remittance  (see  form,  page  81)  and  place  the  check  in  your  Cash  Drawer,  making  the 
proper  entr5^  Balance  your  cash  book.  Rule  and  foot,  and  bring  down  yotir  balance  on 
the  debit  side  (see  form,  pages  68  and  69). 

No.  33. — May  15.  FIFTH  REPORT.  Make  your  report  and  see  that  j-otir  cash 
on  hand  in  the  report  agrees  with  the  cash  as  shown  by  the  balance  on  the  stub  of  your 
check  book,  plus  the  currency  and  checks  in  3'Our  Cash  Drawer;  and  also  see  that  it  agrees 
with  the  balance  of  j^our  Cash  account,  as  shown  in  the  cash  book. 

Present  all  books  and  vouchers  to  your  teacher  for  approval. 

POSTING. 

You  will  post  the  entries  for  this  month  in  the  same  ledger  that  you  used  for  the  April  work,  begin- 
ning on  the  first  blank  page,  which  you  will  ni:mber  /.  Number  the  other  pages  as  the  accounts  are 
opened . 

At  the  top  of  page  i  write  //.  F.  Adams.  At  the  top  of  page  2  write  Merchandise. 
In  the  middle  of  page  2  write  Expense.  At  the  top  of  page  3  write  Merchandise  Discount. 
In  the  middle  of  page  3  write  Furniture  and  Fixtures.  At  the  top  of  page  4  write  Real 
Estate.  In  the  middle  of  page  4  write  Discoiuit.  In  the  middle  of  page  5  WTite  Loss  & 
Gain.  At  the  top  of  page  6  write  Bills  Receivable.  In  the  middle  of  page  6  write  A.  .1. 
Knowles  &  Co.  At  the  top  of  page  7  write  Dickson  &  Young.  In  the  middle  of  page  7 
write  A.  IV.  McKey.  At  the  top  of  page  8  write  F.  C.  Tenner.  In  the  middle  of  page  8 
write  Fletcher  Bros.  At  the  top  of  page  9  write  F.  J  I.  Randall  &  Co.  In  the  middle  of 
page  9  write  Rice  &  Pond.  At  the  top  of  page  10  write  E.  Mason  &  Co.  At  iIk-  top. 
of  page  14  write  Bills  Payable.  In  the  middle  of  page  14  wx'xW  I J  est,  Stone  &  Co.  At 
the  top  of  page  15  write  E.  Weste?i  Tea  &  Spice  Co.  In  tlu-  niiildle  of  ]x\gc  15  wrilo 
Shields  Bros.  At  the  toj)  of  page  16  write  L.  Henncs  &  Co.  In  llie  middle  of  page  16 
write  Chas.  K.  Fox. 

You  may  now  post  your  books.    Post  all  entries  from  your  journal  as  in  previous  sets. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


83 


Posting-  from  Cash  Book. — The  amounts  on  the  debit  side  of  the  cash  book  are 
posted  to  the  credit  side  of  the  accounts  named  in  the  space  at  the  left  of  the  debit  page 
of  the  book.      The  following  shows  the  first  amount  as  posted  to  H.  F.  Adaras'  account. 


r<^: 


'^^y' 


9  "- 


^ 


fj^c?  a 


"  C "  in  the  explanation  space  indicates  that  the  amount  was  taken  from  the  cash 
book,  page  2.  The  amounts  on  the  credit  side  of  the  cash  book  are  posted  to  the  debit 
side  of  the  ledger  accounts  named  in  the  left-hand  explanation  space.  The  following 
illustrates  the  second  amount  posted  from  the  debit  side  of  the  cash  book.  The  debit 
posting  of  this  account  is  from  the  sales  book.     Post  all  debit  items  in  a  similar  manner. 


^^^^-^^^^-^ 


/  f  c?  - 


^ 


6  /  / 


/  £> 


^a- 


^ 


^ 


^ 


^ 


/  / 


/  C> 


The  following  illustrates  the  first  two  amounts  posted  from  the  credit  side  of  the  cash 
book.     Post  all  credit  items  in  a  similar  manner. 


^  e  - 


/ 


-4 


J 

3 


Z<^ 


Z^ 


In  the  second  vertical  column  at  the  left  of  each  page  of  the  cash  book  is  placed  the 
page  of  the  ledger  account  named.  Be  siu-e  that  all  items  from  the  cash  book  have  been 
carried  to  the  ledger. 

Posting  from  the  Sales  Book. — The  footing  of  the  sales  book  should  be  placed  to 
the  credit  of  Merchandise  in  the  ledger,  since  it  indicates  the  amount  of  merchandise  sold, 
and  each  sale  entered  in  the  sales  book  should  be  posted  to  the  debit  of  the  person  to 
whom  the  sale  was  made,  with  the  terms  of  sale  in  the  explanation  space.     The  ledger 


84 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


page  of  this  person's  account  should  be  placed  in  the  vertical  column  at  the  left  of  the 
sales  book.  Add  each  total  column  of  the  sales  book,  carrying  the  footing  of  each  page 
of  this  book  forward  to  the  top  of  the  next  page.  Rule  and  foot  to  May  15th,  and 
carry  this  amount  to  the  credit  of  Merchandise  account  in  j-our  ledger,  writing  the  ledger 
page  in  the  folio  column  of  the  sales  book  opposite  the  footing. 

The  following  illustrates  the  posting  of  the  footing  of  the  sales  book. 


fo- 


yu^t:Z^ 


^.^. 


2. 


^f^rrj^y 


The  following  illustrates  the  first  item  of  the  sales  book  as  posted.      (For  illustration 
of  second  item  of  sales  book,  see  debit  side  of  F.  C.  Tenney's  account,  page  83.) 


■  1^  i>- 


J 


6  ^^■^z::C<:/  f  y/a 


A^i'A^ff 


In  posting  from  the  sales  book,  the  terms  of  the  sales  should  be  carried  to  the  ledger 
to  enable  the  bookkeeper  to  make  out  his  statements  when  due,  should  he  desire  to  do  so. 
It  will  be  seen  that  in  this  set  the  ledger  is  made  up  of  postings  from  three  books  of 
Original  entrj^ — the  journal,  cash  book  and  sales  book — instead  of  from  a  single  book — 
the  journal — as  in  previous  sets.  Any  account  in  the  ledger  may  contain  postings  from 
all  three  of  these  books  of  original  entry.  In  this  case  the  dates  will  not  be  consecutive 
in  the  date  column  of  the  ledger,  as  each  book  of  original  entry  is  posted  entire  before 
another  book  is  taken  up.  The  numbers  in  the  page  column  of  the  ledger  will  refer  to 
different  books,  but  the  explanation  "  C"  will  show  when  the  cash  book  is  indicated,  the 
terms  of  sale  will  indicate  the  sales  book,  while  "J"  may  be  used  to  indicate  the  journal; 
or  the  absence  of  any  explanation  would  indicate  that  book. 


TRIAL  BALANCE. 

Take  a  trial  balance  of  your  ledger.      (For  instructions,  .see  page  33.) 
Do  not  forget  to  place  the  balance  of  cash,  as  shown  by  your  cash  l)ook,  on  the  debit 
side  of  your  trial  balance.     This  is  a  common  omission.     Remember  that  the  cash  l)ook 
is  really  the  Cash  account  of  the  ledger,  and  its  balance,  like  that  of  any  ledger  account, 
must  be  carried  to  the  trial  balance. 

Present  your  trial  balance  to  your  teacher,  and  if  correct,  copy  it  on  the  next  page  of 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


85 


your  trial  balance  book  following  your  April  statement.  Do  not  make  a  statement  of 
gains  and  losses,  resources  and  liabilities,  as  the  trial  balance  is  taken  at  this  time  merely 
to  show  that  your  posting  is  correct,  and  that  you  understand  the  posting  of  the  cash 
book  and  the  sales  book. 

Xo.  34. — May  17.  Rice  &  Pond,  of  Georgetown,  your  state,  have  sent  you  an  order, 
and  kave  given  you  satisf actor}'  references. 

Bill  them  the  goods  at  regular  prices,  subject  to  y<  cash  discount.  This  lot  of  goods 
must  be  sent  by  freight,  and  you  may  prepare  three  shipping  receipts  like  the  model 
receipt  which  follows. 


SHIPPING   RECEIPT. 


^^^  /  V-  190. 


Received  from 


i^jZk 


(Voar  plAce  here.) 


T^^- 


C^:^.--^?^?-?^:^, 


BY  INTER-STATE  TRANSPORTATION  COMPANY, 

The  property  described  below,  in  apparent  good  order,  except  as  noted  (contents  and  condition  of  contents  of  packatjes  unknown), 
marked,  consigned,  and  destined  as  indicated  below,  which  said  Company  agrees  to  carry  to  the  said  destination,  if  on  its. road,  other- 
wise to  deliver  to  another  carrier  on  the  route  to  said  destination. 

It  is  mutually  agreed,  in  consideration  of  the  freight  charged  for  this  service,  as  to  each  carrier  of  all  or  any  of  said  property,  crver 
all  or  any  portion  of  said  route,  to  destination,  and  as  to  each  party  at  any  time  interested  in  all  or  any  of  said  property,  that  every 
service  to  be  performed  hereunder  shall  be  subject  to  all  the  conditions,  whether  printed  or  written,  shown  or  endorsed  hereon,  and 
which  are  hereby  agreed  to  by  the  shipper  and  by  iiim  accepted  for  himself  and  assigns  as  just  and  reasonable. 


MARES,   CONSIGNS  AND    DESTINATION. 


DESCRIPTION   OF  ARTICLES. 


WEIGHT 
SUBJECT  TO   CORRECTION. 


f^.^.^^.  -.-c^yz^/.y  y^S^^ 


->S^-2>r7-'^^-7rt-^y.^'/>-^..iy-7^-^ 


7r.^ 


y^^y.yrz>//.. 


2  ^<^<i^^.-TC7J7IL^ 


-^^ 


For  Inter-State  Transportation  Company, 


ORIGINAL. 

(To  b«  returned  to  the  Bb(ppers-) 


Freight  Agent, 


These  receipts,  sometimes  called  bills  of  lading,  are  generally  made  in  triplicate.  The 
original  receipt  is  generally  forwarded  to  the  person  who  ordered  the  goods;  the  second, 
or  forwarding  receipt,  is  kept  by  the  freight  agent;  and  the  third  receipt  is  allowed  to 
remain  in  the  shipping  book  for  comparison,  in  case  goods  are  lost  or  any  dispute  arises 
in  connection  with  the  shipment.  Take  the  receipts  to  your  teacher  or  the  freight  agent 
for  signature.  Enclose  bill  and  shipping  receipt  in  an  envelope  properly  addressed.  You 
will  make  out  these  shipping  receipts  to  accompany  all  bills  of  merchandise  sold  to  out  of 
town  customers. 


86 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Xo.  35. — May  i8.     Write  a  check  for  $800  and  send  it  to  E.  Westen  Tea  &  Spice 
Co.,  accompanied  by  a  letter  like  the  following. 


Gentlemen : 


^^-7-^- 


in  payment  of  /^^'~77^  i 


Herewith  find  check  on 
for  %^^t^I^^ 


Please  acknowledge  receipt  and  oblige. 
Yours  truly, 

HALL,  HARTWELL  &  CO. 


The  Tolojjram. — The  telegram  has  become  an  important  feature  of  modern  business, 
and  it  is  now  used  very  extensively  in  ordering  goods  for  immediate  delivery.  Most  of 
the  telegraphic  business  of  the  country  is  transacted  by  two  companies,  the  Western 
Union  Telegraph  Company  and  the  Postal  Telegraph  Company.  The  Western  Union 
has  commmiication  with  almost  every  city,  town  and  village  in  the  United  States,  and 
through  the  Atlantic  cable,  with  almost  every  j^art  of  the  world. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


8' 


The  charge  for  a  telegram  depends  somewhat  upon  the  distance,  and,  except  in  the  case  of  cable 
messages,  it  is  a  fixed  sum  for  a  ten-word  message,  and  an  additional  charge  for  each  word  in  excess  of 
that  number,  no  charge  being  made  for  the  name  and  address  of  the  person  to  whom  the  message  is  sent 
or  the  name  of  the  sender.  Night  messages,  that  is,  messages  sent  at  the  convenience  of  the  Company 
after  6  P.  M.,  are  taken  at  about  half  the  regular  rate,  and  a  large  proportion  of  business  messages  are  of 
this  kind. 

In  writing  a  telegram  care  should  be  taken  to  avoid  the  use  of  all  superfluous  words,  and  yet  the 
message  must  be  clear  and  definite,  that  mistakes  may  be  avoided.  Figures  should  be  written  out  in 
full,  since  the  charge  is  the  same  for  a  figiu^e  as  for  a  word;  for  instance,  20  written  in  figures  (  20)  would 
be  charged  as  two  words,  while  written  in  full  (twenty)  would  be  charged  as  only  one  word.  In  sending 
important  messages,  those  in  which  a  mistake  would  mean  the  loss  of  a  large  sum  of  money,  it  is  better  in 
every  case  to  have  the  telegram  repeated;  that  is,  the  operator  at  the  point  to  which  the  message  is  sent 
after  receiving  it  telegraphs  it  back  to  the  operator  at  the  sending  point,  and  the  sender  knows  that  his 
message  has  been  received  as  it  was  sent,  which  is  not  always  the  case,  as  telegraph  operators  are  only 
human,  and  mistakes  are  by  no  means  uncommon.  The  charge  for  repeating  a  message  is  one-half  more 
than  the  original  cost. 

The  cost  of  cablegrams  is  a  certain  amount  for  each  word,  and  the  same  charge  is  made  for  the  address 
as  for  the  words  which  make  up  the  body  of  the  message.  Business  houses  generally  have  a  code  for 
cablegrams;  that  is,  the  name  and  address  are  represented  by  one  word;  for  instance.  Smith,  Jones  & 
Robinson,  42  Soho  Square,  London,  E.  C,  England,  would  be  represented  by  a  single  word,  as 
"Extract." 

The  following  form  of  telegram  shows  the  correct  method  of  writing  a  message 
containing  figures. 


THE   COMMERCIAL  TELEGRAPH   COMPANY. 

INCORPORATED 


21,000  OFFICES  IN   AMERICA. 


CABLE  SERVICE  TO  ALL  THE  WORLD. 


This  Cempany  TRANSMITS  and  DELIVERS  mcBsages  only  on  conditions  llmltlnR  its  liability,  which  have  been  assented  to  by  the  sender  of  the  following  mesflage.' 
Errors  can  be  guarded  agalust  only  by  repeating  a  message  back  to  the  sending  station  for  comparison,  and  the  Company  will  not  hold  Itself  liable  for  errors  or  delaTT 

In  transmission  or  delivery  of  Unreponted  .ncHHaiceH,  beyond  the  amount  of  tolls  paid  thereon,  nor  in  any  case  where  the  claim  is  not  presented  In  writing  within  itxir 

days  alter  the  message  is  tiled  with  the  Company  lor  transmission 

This  is  an  ITNREPE  ATCD  M  ESS  AUE,  and  Is  delirered  by  request  of  the  sender,  under  the  conditions  named  above. 

PHILO   M.   BECKLCY,   President  and  General  Manager. 


Recelver^a   No. 


Time  Filed 


Checic 


^■"  WU   the  following  message  sub)ect  to  the  terms  ) 
on  back  hereof,  which  are  hereby  agreed  to.  I 


(YOUR   PLACE   HKKE). 


^^ 


/^.    190 


UC^-Z^..  v^Z^^^.A:r-^^;-?^ 


READ  THE  NOTICE  AND  AGREEMENT  ON  BACK,  "^t 


88 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


No.  3(5. — May  1 8.  Write  a  telegram,  of  not  more  than  fifteen  words,  ordering  of 
West,  Stone  &  Co.,  lo  half-chests  each  Japan  and  Young  Hyson;  lo  bales  Mocha; 
15  mats  Java. 

Fill  out  the  telegram  blank  and  place  in  Vouchers  for  Others.  Pay  50^'-  in  currency 
for  the  telegram.     Make  the  proper  entr^^ 

;No.  ti7. — May  20.  This  order  calls  for  goods  to  be  sent  to  an  out  of  town  business 
house.  The}^  refer  to  your  own  bank,  and  the  reference  being  satisfactor}^,  3^ou  make  out 
the  bill,  also  the  shipping  receipts,  which  j'ou  will  have  signed  by  the  freight  agent. 
Enclose  bill  and  shipping  receipt  in  an  envelope  properly  addressed. 

No.  38. — May  20.  This  work  has  been  performed  at  a  fixed  price,  and  you  may  pay 
the  bill  by  check. 

Painting  would  come  under  the  head  of  permanent  repairs  to  your  real  estate,  and  you 
may  make  the  proper  cash  book  entry  (rule  20,  page  78). 

No.  39. — May  20.  Mr.  Adams  has  requested  Dickson  &  Young  to  give  him  their 
note  at  60  days  for  $400,  as  his  account  at  the  bank  is  getting  low.  They  have  done  so, 
and  at  the  same  time  have  ordered  more  goods.  Place  the  note  in  your  Cash  Drawer  and 
make  the  proper  entry.       Fill  the  order,  checking  each  item,  and  make  the  proper  entry. 

No.  40. — May  21.  This  is  a  telegraphic  order  and  calls  for  a  receipted  bill,  which 
you  will  enclose  in  a  C.  O.  D.  envelope  and  place  in  Vouchers  for  Others.  Enter  in  the 
sales  book,  as  follows. 


2 


Z  // 


^-Z-^^d^ 


Z£>-=^ 


ZO^ 


Zt^ 

^ 

^ 

/  IP 

Post  to  your  ledger,  opening  a  C.  O.  D.  account  in  the  section  of  j^our  ledger  reserved 
for  accounts  receivable. 


The  following  is  the  form  of  a  C.  O.  D.  account. 


<^  £>  - 


Z/ 


<J 


/  (P 


All  C.  O.  D  sales  should  be  posted  to  this  account,  writing  the  name  of  \.\w  jierson  to 

whom  goods  are  sent  in  the  explanation  space  at  the  left.     The  posting  should  be  made 

immediately  after  the  sale  is  entered  in  the  sales  book. 

Some  business  houses  enter  C.  ().  I),  sales  in  a  special  book  kept  for  that  purpose,  and  do  not  carry 
them  into  the  main  books  until  the  return  has  been  received.  When  this  return  has  been  received  they 
enter  the  cash  in  the  cash  book,  crediting  Merchandise. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  89 

No.  41. — May  21.  Take  from  yoiir  Cash  Drawer  the  note  of  Dickson  &  Young 
received  May  20th,  and  write  the  amount  of  discount  upon  a  discount  memorandum. 
Take  the  note  and  memorandum  to  the  bank,  where  you  will  receive  credit  for  the  net 
proceeds,  if  correct.     Enter  in  your  cash  book  (see  transaction  No.  18). 

No.  42. — May  22.  Make  a  bill  of  the  goods  called  for  in  this  order,  checking  items. 
File  the  order.  Enter  the  sale  in  a  sales  book,  place  the  check  received  on  account  in  the 
Cash  Drawer,  and  make  the  proper  entry.     Acknowledge  the  receipt  of  the  check. 

No.  43. — May  23.  This  invoice  is  for  goods  ordered  from  West,  Stone  &  Co.  by 
telegraph  May  i8th.     Verify  the  bill  and  make  the  proper  entry. 

No.  44. — May  23.  You  have  made  this  purchase  of  Chas.  K.  Fox,  City,  to  supply 
immediate  needs.     Verify  the  bill  and  make  the  proper  entry. 

No.  45. — May  23.  To  accommodate  Rice  &  Pond  you  have  sold  Geo.  H.  Thomas, 
for  cash,  a  sample  lot  of  75  lbs.  Maracaibo  at  18^^/  and  25  lbs.  Rio  at  14}^^,  the  remainder 
of  two  broken  bags. 

Do  not  enter  this  in  the  sales  book,  as  it  is  not  for  a  regular  customer,  but  carry  it 

direct  to  the  cash  book,  givuig  Mcrdiandise  credit  in  that  book.     Make  a  memorandum  of 

the  sale  on  a  slip  of  paper,  and  place  it  in  your  Vouchers  for  Others. 

In  any  wholesale  house  there  will  be  more  or  less  of  these  petty  sales.  They  are  not  entered  in  the 
sales  book,  but  carried  direct  to  the  cash  book. 

No.  40.— May  23.  SIXTH  REPORT.  Render  a  report  and  take  all  papers  to  yotu: 
teacher  for  approval.  Do  not  balance  your  cash  book,  but  see  that  the  cash  balance  on 
your  report  agrees  with  the  amount  of  cash  in  your  Cash  Drawer,  plus  your  bank  balance, 
and  also  that  this  amount  is  the  same  as  the  difference  between  the  two  sides  of  your  cash 
book.     Pencil  foot  the  cash  book  up  to  this  date. 

No.  47. — May  24.  The  Express  Company  has  returned  the  collection  of  May  21st. 
Place  25^/  express  charges  in  Cash  Paid  Out,  or  hand  this  amount  to  the  commercial 
exchange. 

On  the  debit  side  of  the  cash  book  write  C.  O.  D.  In  the  explanation  space,  J.  H. 
Vincent,  and  in  the  money  column  $10.  On  the  credit  side  debit  Expe7ise  for  the  express 
charges,  25^'. 

No.  48. — May  24.  Send  a  telegraphic  message  of  not  more  than  15  words  to  L. 
Hennes  &  Co.,  New  York,  ordering  12  bags  Maracaibo  coffee,  10  hf.  chts.  Oolong  tea 
and  5  cases  Ceylon  tea,  to  be  sent  by  fast  freight.  Pay  35^/  for  the  telegram;  also  pay 
for  having  windows  cleaned,  $1.50.  Hand  this  money  to  the  commercial  exchange,  or 
place  it  in  Cash  Paid  Out. 

No.  49. — May  24.  Fill  this  order  and  place  the  note  in  your  Cash  Drawer,  making 
the  proper  entries  for  the  transaction.  Place  the  order  in  your  Voucher  File.  Write  a 
letter  of  acknowledgment  for  the  note,  place  it,  with  the  invoice,  in  an  envelope  properly 
addressed,  and  place  in  your  Vouchers  for  Others. 

No.  50. — May  25.  Take  a  deposit  slip  and  enter  on  it  the  amount  of  the  check  you 
received  from  F.  C.  Tenney,  May  15th,  and  the  amount  of  Rice  &  Pond's  check  of  May 
22d;  also  $110  currency.  Make  out  a  discount  ticket  for  the  note  of  $600  received  from 
A.  A.  Knowles  &  Co.  yesterday.   Calculate  the  discount  and  find  the  net  proceeds. 

Take  the  deposit  slip,  the  checks,  and  the  note  properly  indorsed,  the  currency,  the 
discount  ticket,  and  your  bank  pass  book  to  the  teller,  who  will  give  you  credit  for 


90  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

the  deposit  and  for  the  net  proceeds  of  the  note.  Do  not  fail  to  enter  these  amounts  on 
the  stub  of  your  check  book.  Make  the  proper  cash  book  entr\-.  (See  transaction  i8, 
page  79.; 

Xo.  51. — May  25.  Write  a  check  for  $700  and  mail  it  to  E.  Westen  Tea  &  Spice  Co., 
to  appl}'  on  account. 

No.  52. — May  26.  This  invoice  is  received  from  L.  Hennes  &  Co.,  in  replj'  to  your 
telegram  of  Ma}-  24th.     Verify  and  file  the  invoice. 

No.  53. — May  26.  This  order  is  received  by  wire.  Check  off  each  item,  fill  the  order 
and  place  the  telegram  in  3'our  Voucher  File.     Make  the  proper  entry  for  the  transaction. 

No.  54. — May  26.  Pay  the  invoice  purchased  of  Chas.  K.  Fox,  May  23d,  by  check, 
less  3^. 

No.  55. — May  26.  This  order  comes  from  a  stranger,  and  as  j-ou  know  nothing  of 
his  standing  j'^ou  may  fill  the  order  and  send  as  directed,  C.  O.  D.  Check  the  order  and 
write  him  that  if  references  prove  satisfactorj-  3'ou  will  be  pleased  to  open  an  account 
with  him.  Remember  to  post  directly  from  the  sales  book  to  the  C.  O.  D.  account,  and 
give  yi  discount  for  cash  on  bill  (see  No.  40). 

No.  56. — May  28.  Make  out  bill  and  verify  the  calculations.  Place  the  order  on 
file  and  make  the  proper  entry. 

No.  57. — May  28.  This  purchase  is  made  of  Chas.  K.  Fox,  City.  Place  the  invoice 
in  yoiur  Invoice  File  and  make  the  proper  entr5^ 

No.  58. — May  28.  C.  O.  D.  on  S.  E.  Kingsley  sent  May  25th  has  been  returned,  and 
you  ma}'  pay  the  express  charges,  50;'-.     Make  the  proper  entry  (see  No.  47). 

No.  59. — May  29.  The  goods  called  for  in  this  invoice  have  been  purchased  of  West, 
Stone  &  Co.,  New  York,  bj-  Mr.  Adams.  Place  the  invoice  on  file  and  make  the  proper 
entry. 

No.  00. — May  29.     Send  a  check  for  $500  to  Shields  Bros.,  to  appl}-  on  account. 

No.  01. — May  30.  The  City  Carting  Company  have  paid  your  freight  bills  and  deliv- 
ered goods  which  you  have  purchased,  and  now  present  their  bill  for  the  month,  which 
you  will  pay  by  check.     Enter  in  the  cash  book  (see  rule  13,  page  28). 

No.  02. — May  31.  Your  own  salary  for  the  month  is  $75,  for  which  you  may  wTite 
a  check;  and  also  write  a  check  for  $45,  favor  of  R.  E.  Leavitt,  clerk. 

No.  0:J. — May  31.  H.  F.  Adams  has  given  the  city  missionary  20  lbs.  Young  Hyson 
tea,  10  lbs.  Japan  tea,  10  lbs.  English  Breakfast  tea.  Charge  him  with  this  amount  at 
the  cost  price.     Enter  in  the  sales  book. 

No.  04. — May  31.  You  have  received  No.  64,  a  note  for  $700,  at  10  days  with 
interest  from  A.  W\  McKey,  for  which  you  will  give  him  credit.  See  that  the  note  is 
correctly  written  and  place  it  in  your  Cash  Drawer. 

No.  <>5. — May  31.  Deposit  all  cash  in  your  bank.  Have  your  bank  book  written  up, 
and  see  that  your  balance  agrees  with  the  ])alance  as  shown  on  the  stul)  of  your  check  book. 

No.  <>(>. — May  31.  Prepare  your  report  and  hand  in  all  \()ucliers  to  your  teacher  for 
approval.  Be  sure  that  no  careless  work  is  handed  in.  Balance  your  cash  l)ook  and  .see 
that  the  cash  l^alance  as  shown  by  the  cash  book  agrees  with  the  bank  balance  as  shown 
on  the  stub  of  the  check  book. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  91 

Some  bookkeepers  keep  a  Cash  account  in  the  ledger  and  carry  to  the  debit  side  the  footing  of  the 
left-hand  page  or  pages  of  the  cash  book  and  to  the  credit  side  the  footing  of  the  right-hand  page  or 
pages  of  the  cash  book.  This  is  unnecessary,  since  the  balance  of  the  cash  book  itself  will  show  the 
same  result  that  this  account  would  show  when  balanced  in  the  ledger.  Keep  no  Cash  account  in  the 
ledger,  but  do  not  forget  to  carry  the  balance  of  the  cash  book  into  the  trial  balance,  the  same  as  if 
the  account  were  kept  in  the  ledger. 

Post  from  all  your  books  to  the  ledger  and  check  your  postings.  Be  sure  that  the 
total  of  the  sales  book  is  carried  to  the  credit  of  Merchandise.  Make  out  your  monthly 
statement  to  each  customer.  Take  a  trial  balance  of  differences  only,  and  be  sure  that 
the  balance  of  cash  is  entered  on  the  debit  side  of  the  trial  balance. 

The  following  is  your  inventory  of  unsold  merchandise: 


26  hf.  chts 

.  Oolong,  1300  lbs., 

48^/ 

18       " 

Young  Hyson,  1260  lbs., 

33'/ 

18       " 

B.  Breakfast,  loSo  lbs.. 

31'/ 

15  cases 

Ceylon,  750  lbs.. 

35'/ 

12  bales 

Mocha,  1800  lbs.. 

23'/ 

26  mats 

Java,  1950  lbs., 

225^ 

1575  lbs. 

Maracaibo, 

11'/ 

650  lbs. 

Rio, 

10'/ 

34  boxes 

W.  Pepper,  340  lbs., 

23^ 

24      " 

Cinnamon,  240  lbs., 

27^ 

26      " 

Cloves,  260  lbs., 

14^ 

29      " 

Ginger,  290  lbs., 

22'/ 

no  lbs. 

Nutmegs, 

60/ 

25  hf .  chts. 

Japan,  1500  lbs., 

23  r/' 

Office  furniture  and  fixtures  are  valued  at  ic^  less  than  cost. 

Office  books,  stationery  and  unexpired  insurance  are  valued  at  $98.75. 

Your  real  estate  is  valued  at  cost,  as  shown  by  the  debit  side  of  your  ledger  account. 

Calculate  the  amount  of  your  inventory,  and  write  the  items  and  amounts  in  your  trial 
balance  book.  After  you  have  taken  the  trial  balance,  jorepare  statements  of  gains  and 
losses   and  resources  and  liabilities,  according  to  instructions  below. 

In  making  your  statement  of  losses  and  gains,  include  Merchandise  Discount  and 
Furniture  and  Fixtures;  in  making  statement  of  resources  and  liabilities,  always  include 
all  inventories  of  merchandise,  furniture  and  expense  items  among  the  resources. 

FORMS  OF   LOSS  AND  G'AIN   STATEMENT  AND  BALANCE   SHEET. 

In  the  previous  work  the  student  has  prepared  simply  a  statement  of  losses  and  gains 
and  of  resources  and  liabilities.  This  work  was  designed  to  familiarize  the  student  with 
only  the  fundamental  principles  of  bookkeeping.  Now  that  the  student  has  taken  up  the 
study  of  practical  bookkeeping,  we  have  introduced,  instead  of  the  elementary  statements, 
the  simplest  forms  of  the  accountant's  regular  loss  and  gain  statement  and  balance  sheet. 
The  forms  which  we  present  are  those  which  are  universally  used  by  experienced  account- 
ants and  auditors. 

The  following  illustrations  differ  in  many  respects  from  the  forms  which  have  heretofore  been  pre- 
sented in  text-books  on  bookkeeping,  and  we  believe  that  all  progressive  teachers  will  welcome  this 
change  from  the  theoretical  to  the  practical. 


92 


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Analysis  of  Statement  of  Losses  and  Gains. — The  loss  and  gain  statement  is 
closed  in  two  sections.  The  first  section  represents  the  gain  on  merchandise,  without 
taking  into  account  the  expenses  of  the  business;  the  second  section  contains  the  expenses 
of  the  business,  the  gain  on  merchandise  discount,  and  shows  the  net  gain  of  the  business 
proper.  If  there  are  transactions  in  stocks  and  bonds,  or  anything  outside  of  the 
business,  the  gain  or  loss  on  such  transactions  should  be  included  in  a  third  section  of  the 
loss  and  gain  statement. 

On  the  debit  side  of  the  first  section  of  the  loss  and  gain  statement,  we  have  (i) 
merchandise  on  hand  at  the  close  of  last  month;  (2)  cost  of  mdse.  during  the  month. 
These  two  items  are  entered  in  the  first  column,  added,  and  their  sums  extended  into  the 
second  column.  In  the  above  instance  there  was  no  merchandise  on  hand  at  the  close  of 
last  month,  hence  there  is  no  amotmt  after  this  item. 

On  the  credit  side  of  the  loss  and  gain  statement  in  the  first  section,  we  have  (3) 
amount  of  merchandise  sold  during  the  month;  (4)  merchandise  now  on  hand,  as  per 
inventory. 

■    The  amounts  of  these  two  items  are  entered  in  the  first  cohnnn,  and  their  sum  extended 
into  the  second  coluuui.      It  is  evident  that  the  difference  between  the  amount  of  mer- 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


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chandise  on  hand  at  the  beginning  of  the  month  plus  the  amount  purchased  during  the 
month,  and  the  amount  of  merchandise  sold  during  the  month  plus  that  on  hand  at  the 
end  of  the  month,  will  be  the  net  gain  on  merchandise.  This  net  gain  in  the  above 
statement  is  found  to  be  $1440,  and  the  amount  is  written  after  No.  5,  Gain  carried  dow7i. 

In  the  second  section  of  the  statement  of  losses  and  gains,  we  have  on  the  debit  side, 
(6)  the  cost  of  expense;  (7)  the  amount  of  unexpired  insurance  and  stationer>^,  which, 
paid  for  under  expense,  has  not  yet  been  used;  (8)  the  loss  on  discoimt;  (10)  the  loss  on 
furniture  and  fixtures  on  account  of  depreciation  in  value. 

In  the  second  section  of  the  loss  and  gain  statement,  on  the  credit  side,  we  have  (11) 
the  net  gain  on  merchandise,  which  is  written  after  Gain  brought  down  (that  is,  this  gain 
is  brought  down  from  the  first  section);  and  (12)  the  gain  on  merchandise  discount. 
The  difference  between  the  sum  of  the  debit  and  the  sum  of  the  credit  amounts  will  show 
the  net  gain  on  the  business.    This  gain  is  written  in  red  ink  after  No.  13  on  the  debit  side. 

When  the  proprietor  examines  the  above  statement,  he  can  tell  at  a  glance  the  amount 
of  merchandise  purchased  during  the  month,  the  amount  of  sales,  the  amount  on  hand, 
his  gain  on  merchandise,  and  his  net  gain  on  the  business  proper;  and  if  he  has  purchased 
and  sold  stocks  and  bonds,  bank  stock,  real  estate,  or  anything  of  this  character,  such 
transactions  should  be  shown  in  a  third  section  of  the  loss  and  gain  statement,  and  the 


94  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

statement  should  show  the  gain  on  merchandise,  the  net  gain  on  the  business  proper,  and 
the  net  gain  or  loss  on  his  entire  transactions. 

A  business  might  be  paying,  and  the  proprietor  still  be  losing  money  on  account  of 
losses  sustained  by  outside  transactions.  The  profit  on  merchandise  might  be  suflEcient, 
and  still  the  business  be  conducted  at  a  loss,  on  account  of  having  enormous  expenses. 
For  this,  and  various  other  reasons,  it  is  absolutely  essential  that  the  loss  and  gain 
statement  should  be  closed  in  sections,  so  that  the  proprietor  may  determine  at  a  glance 
the  exact  condition  of  his  business. 

INSTRUCTIONS  TO  THE  STUDENT. 
How  TO  Make  out  Loss  and  Gain  Statement  for  the  Month  Ending  May  31. 

The  numbers  given  in  the  following  instructions  agree  with  the  numbers  given  in  model  statement 
of  losses  and  gains,  pages  92  and  93. 

1.  Turn  to  the  Merchandise  account  in  your  ledger.  As  this  is  the  beginning  of  the 
business,  there  was  no  merchandise  on  hand  at  the  beginning  of  the  month,  hence  nothing 
will  be  written  after  Merchandise  on  hand  at  the  close  of  last  month,  but  you  may  write 
these  words  in  your  statement  of  losses  and  gains  (see  model,  page  92). 

2.  The  sum  of  the  items  on  the  debit  side  of  the  Merchandise  account  in  your  ledger 
represents  the  cost  of  merchandise  during  the  month.  Place  the  amount  after  Merchan- 
dise purchased duri^ig  the  month  (see  model.) 

3.  The  sum  of  the  items  on  the  credit  side  of  your  Merchandise  account  represents 
the  amount  of  merchandise  you  have  sold  during  the  month.  Place  the  amount  after 
Merchandise  sales  during  the  jnonth  (see  model.) 

4.  Take  the  amount  of  your  inventory  and  write  it  after  Merchandise  on  hand  7ion'. 

5.  Take  the  difference  between  the  sum  of  the  items  on  the  debit  side  and  the  sum 
of  the  items  on  the  credit  side  of  your  loss  and  gain  statement,  and  write  the  difference,  in 
red  ink,  after  Gain  carried  down  on  the  debit  side  of  your  loss  and  gain  statement  in  the 
second  column,  after  which  rule  up  the  first  section  of  your  loss  and  gain  statement,  as 
per  model. 

6.  Take  the  amount  of  cost  of  expense,  as  shown  by  your  trial  balance,  and  write  it 
after  Expense. 

7.  Take  the  amount  of  expense  as  shown  by  inventory,  and  subtract  it  from  cost  of 
expense.     Extend  the  difference  into  the  second  column  (see  model,  page  92). 

8.  Take  the  amount  of  the  loss  on  discount,  as  shown  by  your  trial  balance,  and 
write  it  after  Discount. 

9.  Depreciation  as  under  : 

10.  A  depreciation  of  10/  has  been  allowed  for  wear  and  tear  on  office  furniture. 
Write  the  amount  of  this  dejoreciation,  which  is  a  loss  U)  the  business,  after  Furniture 
and  Fixtures,  under  Depreciation  (see  model). 

1 1 .  Bring  down  the  amount  of  the  gain  shown  in  the  first  section  of  loss  and  gain 
statement,  and  write  it  under  Gain  brought  down  in  the  second  section  of  loss  and  gain 
statement. 

12.  Take  the  gain  on  merchandise  discount,  as  shown  by  your  trial  balance,  and  write 
the  amount  after  Mercha?idise  Discount. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  95 

13.  Take  the  difference  between  the  sum  of  the  items  on  the  debit  side  and  the  stun 
of  the  items  on  the  credit  side  of  your  loss  and  gain  statement,  and  write  the  amount, 
in  red  ink,  after  Net  Gain.  Rule  up  the  second  section  of  your  loss  and  gain  statement, 
as  per  model. 

Analysis  of  Statenieut  of  Resources  aiul  Lial)ilities. — In  preparing  a  statement 
of  resources  and  liabilities,  commence  with  the  most  available  asset.  Cash.  Write  the 
amounts  of  cash  in  safe  and  in  bank  separately  in  the  first  column.  Find  the  sum  of  these 
amounts,  and  write  the  sum  in  the  second  column.      (See  model,  pages  96  and  97. ) 

Various  kinds  of  property  owned  by  the  btisiness  should  next  be  listed  under  the  title, 
Properties  as  under:  Real  estate  is  listed  at  its  ledger  valuation,  on  the  presumption  that 
it  is  worth  at  the  present  time  the  amount  paid  for  it.  Naturally  there  has  been  wear 
and  tear,  or  depreciation,  upon  office  furniture  and  fixtures.  The  cost  of  office  furniture 
and  fixtures  should  be  shown  in  the  first  column,  and  under  this  should  be  written  the 
amount  charged  off  for  depreciation.  The  difference,  or  present  value  of  the  furniture 
and  fixtures,  should  be  extended  into  the  second  column.  Goods  on  hand  should  be 
inventoried  at  their  cost  price,  and  the  amount  written  in  the  second  column.  If  there  is 
anything  on  hand  which  was  charged  to  Expense  when  bought,  it  should  be  considered 
an  inventory  and  listed  in  the  second  column. 

The  next  title.  Sundry  trade  debtors  as  wider:  should  include  all  amounts  owing 
the  business  by  firms  and  individuals.  The  amount  of  notes  we  hold  should  be  written 
after  Bills  Receivable ,  and  the  amount  due  us  on  account  should  be  written  after  Open 
book  accounts  co?isidered  good.  Usually  an  amount  is  deducted  from  Open  book  accounts 
as  a  reserve  for  bad  debts.  Open  book  accounts  are  also  frequently  divided  into  two 
classes — Open  book  accounts  considered  good  and  Open  book  accounts  cotisidered  doubtful.  If 
there  are  any  other  assets,  they  should  be  enumerated  in  detail  on  the  debit  side  of  the 
statement  of  resources  and  liabilities.  In  connection  with  this  statement,  it  is  usually 
customary  to  make  out  a  list  of  all  persons  owing  us  and  all  persons  whom  we  owe. 

We  next  proceed  to  the  enumeration  of  the  liabilities.  These  are  written  on  the  credit 
or  right  side  of  the  statement.  The  first  title,  Sundry  trade  creditors  as  under:,  should 
include  all  persons  or  firms  whom  we  owe,  either  by  note  or  on  account.  The  amount 
that  we  owe  on  otir  notes  should  be  written  after  Bills  Payable.  The  amount  that  we  owe 
on  account  should  be  written  after  Open  book  accounts.  If  the  business  has  other  liabilities, 
they  should  be  here  enumerated.  Find  the  sum  of  the  liabilities,  and  write  the  sum  in 
the  right-hand  column,  drawing  one  red  line,  as  shown  in  the  model. 

Next  write  the  amount  the  proprietor  has  invested  in  the  business,  and  from  this 
amount  subtract  his  withdrawal.  To  the  remainder  add  the  net  gain  from  the  state- 
ment of  losses  and  gains,  and  extend  the  total  to  the  last  column,  in  red  ink,  under  the 
title,  Present  worth  of  business.  Foot  and  rule  up  the  statement  of  resources  and  liabilities, 
as  per  model.  A  balance  sheet  or  statement  of  resources  and  liabilities,  made  out  as 
above,  will  show  in  classified  form  the  actual  assets  and  liabilities  of  the  business.  The 
proprietor  of  the  business,  in  examining  such  a  balance  sheet,  can  tell  at  a  glance  the 
amount  of  property  he  has  on  hand,  and  the  basis  of  its  valuation,  the  balance  sheet 
showing  any  amount  that  has  been  charged  off  for  depreciation,  or  anything  that  has  been 
added  on  account  of  the  increase  in  value.  All  additions  and  subtractions  should  be  made 
in  the  first  column,  and  only  the  totals,  or  the  differences,  extended  to  the  second  column. 


96 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


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INSTRUCTIONS  TO   THE   STUDENT. 

How  TO  Make  out  Statement  of  Resources  and  Liabilities  for  Month 

Ending  May  31. 

1.  Ascertain  the  amount  of  cash  in  the  safe  or  drawer,  and  write  it  after  Cash  in  safe. 

2.  Ascertain  from  your  check  book  the  amount  of  cash  in  bank,  and  write  it  after 
Cash  in  bank.  The  amounts  of  cash  in  bank  and  in  safe  shoukl  l)e  added,  and  written  in 
the  second  money  coknnn  of  the  statement  (see  above  model).  The  amount  of  cash 
shown  by  the  statement  should  be  the  same  as  that  shown  on  the  trial  balance. 

3.  Take  the  amount  of  real  estate  ($12125),  as  shown  by  your  trial  balance,  and 
write  it  after  Real  estate,  ledger  valuation  in  the  second  column  of  your  statement  (see 
model  form). 

4.  Take  the  amounts  charged  to  Furniture  and  Fixtures,  as  shown  l)y  your  trial 
balance  ($231),  and  write  it  after  Furniture  and  Fixtures  in  the  first  monej^  cohnnn  of  }our 
statement. 

5.  A  depreciation  of  \o''<  is  allowed  on  furniture  and  fixtures.  Write  the  amount 
of  depreciation  ($23.10)  after  Less  depreciation,  and  subtract  this  amount  from  the 
amount  of  furniture  and  fixtures,  and  extend  the  diflference  to  the  second  colunni  of 
your  statement. 


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6.  Write  the  amount  of  the  inventor}-  of  merchandise  after  the  proper  titlt  in  the 
second  cohimn  of  your  statement.  You  should  write  your  own  name  in  plact  of  Mr. 
White's,  as  the  value  of  the  merchandise  is  estimated  bj-  you. 

7.  Write  the  inventory  of  expense  ($98.75)  after  the  proper  title. 

8.  Take  the  amount  of  bills  receivable,  as  shown  by  j'our  trial  balance,  and  (vrite  it 
after  this  number. 

9.  Find  the  sum  of  the  amounts  owing  the  business  by  different  persons,  q.\  shown 
by  your  trial  balance,  and  write  it  after  this  number.  The  persons  who  owe  H.  F,  Adams 
are:  A.  A.  Knowles  &  Co.,  Dickson  &  Young,  A.  W.  McKe}*,  F.  C.  Tenney_  F.  H. 
Randall  &  Co.,  Rice  &  Pond,  E.  Mason  &  Co. 

The  sum  of  the  amounts  owing  the  business  by  the  above  will  be  the  amount  of  Open 
book  accounts  considered  good. 

10.  Write  the  amount  of  bills  payable,  shown  by  your  trial  balance,  after  this  number. 

11.  Find  the  sum  of  the  amounts  that  H.  F.  Adams  owes  different  persons,  as  shown 
by  3''our  trial  balance,  and  write  this  sum  after  Open  book  accounts.  Find  the  sum  of  5-our 
Open  book  accounts  and  Bills  Payable,  and  write  the  sum  under  the  single  ruled  line,  as 
shown  in  above  model. 

12.  Write  the  amount  of  H.  F.  Adams'  investment  after  this  number,  according  to 

Com. — 7 


98  MODERN    ILLUSTRATIVE    BOOKKEEPING, 

model.     The  amount  of  his  investment  will  be  the  total  of  the  amounts  on  the  credit  side 
of  H.  F.  Adams'  account  in  the  ledger. 

13.  Write  the  amount  of  H.  F.  Adams'  withdrawals  after  this  number.  The  total  of 
the  amounts  on  the  debit  side  of  his  accomit  in  the  ledger  will  be  the  sum  of  the  with- 
drawals. Subtract  the  withdrawals  from  the  amount  invested,  and  write  the  difference 
below  the  single  ruled  line  (see  model). 

14.  Write  the  amount  of  the  net  gain,  as  shown  by  your  loss  and  gain  statement, 
after  this  number. 

15.  Add  the  net  gain  to  the  net  investment  (the  difference  between  H.  F.  Adams' 
investment  and  withdrawals),  and  write  the  amount  after  this  number  in  the  last  money 
column.     Foot  and  rule  your  statement  of  resources  and  liabilities,  as  indicated  in  model. 

Hand  yoiu"  statement  of  losses  and  gains  and  your  statement  of  resources  and  liabilities 
to  your  teacher  for  approval.  If  correct,  close  your  ledger,  and  hand  in  all  your  books 
to  yoiu"  teacher  for  examination. 

EXERCISES    IN    BANK    DISCOUNT   AND    INTEREST. 

Take  a  sheet  of  journal  paper  and  arrange  a  cash  book  for  the  following  transactions. 
Write  the  notes  on  a  sheet  of  foolscap. 

In  discounting  notes,  always  find  first  the  due  date  of  the  note,  then  find  the  actual  number  of  daj'S 
from  the  date  of  discount  to  the  due  date,  and  calculate  the  discount  for  this  time. 

May  I. — You  have  on  hand  D.  H.  Farley's  note  for  $1200,  dated  this  day,  at  four 
months.  Have  it  discounted  at  the  City  Bank  at  6"^.  Write  the  note  and  make  the 
proper  cash  book  entries. 

May  2. — Desiring  to  borrow  money,  you  arranged  with  E.  M.  Parker  to  indorse  a 
note  of  $4500  for  you,  payable  at  the  City  Bank  in  90  days,  and  the  City  Bank  has  dis- 
counted this  note  and  placed  the  net  proceeds  to  your  credit.  Write  the  note  and  make 
the  cash  book  entries  (see  No.  14,  page  75). 

May  3.— You  have  on  hand  T.  M.  Hunt's  note  for  $875.50,  dated  April  20th,  at  four 
months.  Have  this  note  discounted  at  the  City  Bank  at  6v.  Write  the  note  and  make 
the  cash  book  entries. 

May  4. — You  have  outstanding  a  note  in  favor  of  Reed  &  Barton,  dated  April  25th, 
at  three  months,  for  $950,  and  you  pay  it  to-day  less  the  discount  for  the  unexpired 
time.     Write  the  note  and  make  the  proper  cash  book  entries.     (Credit  DiscoiDit.^ 

May  5.— You  have  on  hand  J.  B.  Freeman's  note  for  $728.50,  dated  April  5th.  at 
four  months.  He  pays  it  to-day  in  cash,  less  discount  for  the  unexpired  time.  Write  the 
note  and  make  the  proper  cash  book  entries. 

May  7.— You  have  on  hand  C.  B.  Fenner's  note  for  $1100,  dated  April  25th,  at  90 
days.  Have  it  discounted  to-day  at  5'/.  Write  the  note  and  make  the  proper  cash  book 
entries. 

May  7. — You  have  a  note  outstanding  in  favor  of  Charles  Tangdon  for  $1200,  dated 
April  2oth,  at  four  months.  If  you  will  pay  it  now,  Langdon  offers  to  allow  you  9'r  for 
the  unexpired  time.     Accept  the  proposition  and  make  the  proper  cash  l)ook  entries. 

May  8.— D.  W.  Evans  &  Co.  owe  you  a  note  of  $7000,  dated  April  30th,  at  four 
months.  Needing  the  money,  you  offer  them  8','  discount  if  they  will  pay  the  note  to-day, 
which  they  do.     Make  the  proper  cash  book  entries. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  99 

May  9. — You  have  on  hand  Sam.  F.  Curtis'  note  for  $1200,  dated  April  20th,  at  60 
days,  with  interest  at  6'x.  You  have  it  discounted  at  the  City  Bank  to-day.  Write  the 
note  and  make  the  cash  book  entries. 

The  above  is  an  interest-bearing  note,  and  in  discounting  an  interest-bearing  note,  the  bank  will  first 
find  the  amount  due  at  maturity.  S.  F.  Curtis'  note  of  April  20th,  at  60  da^-s,  will  be  due  June  19th,  and 
the  interest  on  |i2oo  from  April  20th  to  June  19th,  60  days,  equals  $12,  which,  added  to  $1200,  makes 
$1212,  the  amount  due  June  19th.  This  amount  should  be  -^-ritten  on  the  face  of  the  note,  in  red  ink, 
bv  the  bank  teller.  You  have  the  note  discounted  May  9th.  The  bank  teller  will  find  the  time  from 
Mav  9th,  the  date  of  discount,  to  June  19th,  the  date  of  maturity  (41  days),  and  will  compute  the  dis- 
count on  $1212,  the  amount  due  at  maturity,  and  deduct  this  discount  from  $1212,  leaving  I1203.72,  the 
net  proceeds  of  the  interest-bearing  note. 

In  this  transaction,  3-011  have  received  $1200  for  the  face  of  the  note.  Debit  Cash, 
$1200;  in  the  first  explanation  space  write  i5'///j'  Receivable,  and  in  the  second  explanation 
space,  S.  F.  Ciwtis  note  4  '20.  The  bank  allowed  you  $12  interest.  Debit  Cash,  $12;  in 
the  first  explanation  space  write  Interest,  and  in  the  second  explanation  space,  07i  above 
note.  The  bank  charged  you  discotmt,  $8.28.  On  the  credit  side  of  the  cash  book  write 
$8.28,  in  the  first  explanation  space,  Discotmt,  and  in  the  second  explanation  space,  S.  F. 
Curtis  note  ^'20. 

May  10. — You  have  outstanding  a  note  for  $1500  in  favor  of  Barnes  Bros.,  dated 
April  17th,  at  ninety  days,  with  interest  at  5'^r-.  Barnes  Bros,  need  the  money,  and  agree 
to  allow  you  6fc  discount  if  you  will  pay  the  note  to-day,  which  you  do.  Write  the  note 
and  make  the  proper  cash  book  en tries.( Credit  Cash  for  interest;  debit  Cash  for  discount.) 

In  this  problem  calculate  the  interest  at  5",  and  the  discount  at  6 , . 

May  12. — You  have  on  hand  the  note  of  The  Allen  Chemical  Company  for  S2650, 
dated  April  12th,  at  four  months,  with  interest  at  6'^.  You  have  it  discounted  to-day  at 
the  City  Bank  at  5^^-;.     Write  the  note  and  make  the  cash  book  entries. 

O.  M.  Curtis  gave  you  a  note  March  13th,  at  60  days,  for  $890.75,  with  interest.  The 
note  is  due  to-day,  and  Curtis  has  paid  you  the  amount  due  to  redeem  his  note.  Write 
the  note  and  make  the  proper  cash  book  entries. 

In  the  above  problem  the  interest  should  be  found  for  the  time  of  the  note  at  d,.  In  the  cash  book 
Cash  should  be  debited  for  the  face  of  the  note,  in  the  first  explanation  space  Bills  Receivable  should  be 
written,  and  in  the  second  explanation  space,  O.  M.  Curtis  note 3  ij.  Cash  should  also  be  debited  for 
the  amount  of  interest  on  the  note  ($8.91);  in  the  first  explanation  space  write  Interest,  and  in  the  sec- 
ond explanation  space,  o?t  above  note. 

May  14. — Your  note  for  $746,  in  favor  of  G.  W.  Longley,  dated  Feb.  14th,  at  three 
months,  with  interest,  is  due  this  day,  and  you  paj-  the  note  and  interest.  Write  the 
note  and  make  the  necessary  cash  book  entries. 

This  problem  is  exactly  the  reverse  of  the  preceding  one.  Cash  is  credited  and  Bills  Payable  debited, 
with  G.  IV.  Longley  note  2/143.8  explanation,  and  Cash  credited  and  Interest  debited,  with  on  above  note 
as  explanation  on  the  credit  side  of  the  cash  book. 

A.  S.  Hewitt's  note  of  ]March  14th,  at  two  months,  for  $722.87,  with  interest,  is  due 
to-day,  and  he  has  paid  the  note.     Write  the  note  and  make  the  proper  cash  book  entries. 

May  15. — Yoirr  note  for  $1262.25,  in  favor  of  L.  E.  Pearson  &  Co.,  dated  March  31st, 
at  45  days,  with  interest  at  5/,  is  due  to-day,  and  yovi  pay  the  note  and  interest.  Write 
the  note  and  make  the  proper  cash  book  entries. 

You  have  j'our  note  for  $825,  favor  E.  C.  Ayer,  and  indorsed  by  him,  dated  this  day, 
at  three  months,  discounted  at  the  Commercial  Bank  at  6^,  and  receive  cash  for  the  net 
proceeds.     Write  the  note  and  make  the  cash  book  entries. 


100 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


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MODERN    ILLUSTRATIVE    BOOKKEEPING. 
Price  I^ist  for  AIay  axd  June  (Continued). 


101 


Flour,  Northern  Star    .    .    .  Brl. 

"      Searchlight  Pastry    .  " 

"      Graham Case 

H.  O.  Buckwheat  .....  " 

Oatmeal,  Pawnee Brl. 

Quaker  R.  O Case 

Sugar,  Granulated Brl. 

Rice 

Com Doz. 

Tomatoes " 

Beans,  Lima " 

1 

Soap,  Ivory Box 


lbs. 


300 
150 


4.08 
4.60 


4.10 
4.5S 


2.85  2.90 
3-25  3-20 
4-35  4-3° 


3-49 

67/s 

.85 
1.20 

.81 
7.27 


3-54 
5.54: 

3/ 


1. 10 

•95 
1.07 
7.01 


4.12 
4.56 
2.95 
3-15 
4-25 
3-59 

.86 
1. 19 

.82 
7.26 


4.14 
4.54 
3.00 
3.10 
4.20 
3-64 


6 


8 


4.16  4.18  4.20 

i 
4.52  4-50, 448 

2.86  2.91  2.96 

3.24  3.19  3.14 

4.34  4-29  4-24 


3-50  3-55 

I  !        , 

^%\  5Vs    sH 

sH]  6ys  6'^ 
1.09    .87  1.08 

.96  1. 18  .97 
1.06  .83  1.05 
7.02  7.25  7-03 


4.22 

4.46 
3.01 


9 


4.24 
4.44 
2.87 


10 


4.26 

4.42 

2.92 


11     12 


13 


4.28  4.30 

4.40  4.38 

1 
2.97  3.02 


3-09i3-23,3-i8  3.13  3-o8 


3.60 
6H 

} 
.88 

1. 17 

.84 

7.24 


4.19 
3-65 

ey2 
1.07 
.98 
1.04 
7.04 


400 

3-51 
6% 

.89 
1. 16 

.85 
7-23 


4.28 


3-56 
5% 

1.06 


1.03 
7.05 


4.23  4.18 

3-66 

•98 
1.07 


3.61 
6^ 

.90 
99  I-I5 


4-32 
4-36 
2.88 
3.22 

4.32 
3-52 


.86 
7.22 


1.02 
7.06 


.91 

1. 14 

.87 

7.21 


Price  List  for  May  and  June  (Continued). 


Flour,  Northern  Star  .    . 
"       Searchlight  Pastrj' 
"      Graham 

H.  O.  Buckwheat    .    .    . 

Oatmeal,  Pawnee  .... 

Quaker  R.  O 

Sugar,  Granulated    .    .    . 

Rice      

Com 

Tomatoes 

Beans,  Lima 

Soap, Ivory     


Brl. 

Case 

Brl. 

Case 

Brl. 

(< 

Doz. 


lbs. 


300 
150 


Box 


14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

4-34 

4-36 

4.38  4.40 

4.42 

4.44 

4.46 

4.48 

4-5° 

4^52 

4-54 

4.34 

4.32 

4.30  4.28 

4.26 

4.24 

4.22 

4.20 

4  18 

4.16 

4.14 

2-93 

2.98 

3-03  3-o8 

2.89 

2.94 

2.99 

3-04 

2.80 

2.84 

2.82 

3-17 

3.12 

3.07  3.02 

3.21 

3.16 

3^ii 

3.06 

3-3° 

3.26 

3.28 

4.27 

4.22 

4.17  4.12 

4^31 

4.26 

4.21 

4.16 

4.40 

4.36 

4.38 

3-57 

3-62 

3-67 

3-72 

3-53 

3^58 

3-63 

3.68 

3^44 

3-48 

3-46 

5^ 

5% 

ey^ 

5X 

(>% 

5^ 

6X 

5^ 

sH 

5H 

5/2 

e% 

6% 

5% 

6% 

57/s 

6){ 

5H 

6H 

6H 

6% 

6y, 

1.04 

•92 

1.03 

•93 

1.02 

•94 

I.OI 

r95 

I.OO 

.96 

•99 

I.OI 

I-I3 

1.02 

1. 12 

1.03 

I. II 

1.04 

1. 10 

1.05  1.09 

1.06 

I.OI 

•89 

•99 

.90 

•98 

•91 

•97 

•92 

•96     -93 

•95 

7.07 

7.19 

7.09 

7.18 

7.10 

7.17 

7.11 

7.16 

7.12 

7.15 

7-13 

4.56 

4.12 

2.83 

3^27 

4^37 

3-47 

6H 

■97 
1.08 

•94 
7.14 


102  MODERN    ILLUSTRATIVE    BOOKKEEPING. 


QUESTIONS. 


1 .  Explain  the  use  of  the  cash  book  ? 

2.  WTiere  should  cash  received  be  placed? 

3.  WTiere  should  cash  paid  out  be  placed? 

4.  ^\'^lat  should  the  difference  between  the  sides  of  the  cash  book  show? 

5.  WTi}^  should  the  cash  book  be  balanced  frequenth^? 

6.  When  should  it  be  balanced  daily? 

7.  WTiat  ledger  account  does  the  cash  book  enable  us  to  dispense  with? 

8.  How  should  you  show  the  balance  of  cash  in  the  trial  balance? 

9.  Explain  the  use  of  the  sales  book. 

10.  To  what  accoimt  in  the  ledger,  and  to  which  side  of  the  account,  should  the  foot' 
ing  of  the  sales  book  be  carried  ? 

11.  In  which  money  column  of  the  sales  book  must  all  discounts  and  allowances  appear? 

12.  What  should  be  the  first  entr}^  in  the  journal-daybook  of  an}'  business? 

13.  Why  are  persons  debited  from  the  sales  book  for  merchandise  sold  them  for  cash, 
and  then  credited  from  the  cash  book  ? 

14.  WTiat  is  meant  by  indorsing  a  note? 

15.  What  is  bank  discount  ? 

16.  For  what  length  of  time  is  bank  discount  always  calculated? 

1 7 .  How  would  you  proceed  to  find  the  time  of  discount  ? 

18.  What  entry  should  be  made  on  the  debit  side  of  the  cash  book  when  a  bill  receiv- 
able is  discounted  ? 

19.  What  entry  should  be  made  when  a  bill  payable  is  discounted? 

20.  What  entry  should  be  made  on  the  credit  side  of  the  cash  book  in  either  case? 

21.  Define  merchandise  discount. 

22.  When  is  merchandise  discount  debited?     When  credited ? 

23.  To  which  side  of  the  ledger  should  amounts  on  the  left-hand  side  of  the  cash  book 
be  carried?     To  which  side  the  amounts  on  the  right-hand  side? 

24.  How  .should  the  cash  book  posting  be  designated  in  the  ledger? 

25.  Why  should  the  terms  of  sale  be  shown  in  posting  the  sales  book  items  to  the 
ledger  ? 

26.  Where  should  the  footing  of  the  sales  book  appear  in  the  ledger? 

27.  What  is  a  shipping  receipt?     Why  are  these  receipts  made  in  triplicate,  and  what 
is  done  with  each  copy  ? 

28.  What  care  should  be  taken  in  writing  a  telegram? 

29.  How  should  figures  be  indicated  in  a  telegram  ? 

30.  What  is  meant  by  repeating  a  message  ?     What  is  a  code  ? 

31.  Describe  the  method  of  entering  C.  O.  D.  sales  in  the  sales  book  and  in  the  ledger. 

32.  How  should  petty  cash  sales  be  entered? 

33.  In  how  many  sections  is  the  loss  and  gain  statement  closed? 

34.  What  does  the  first  section  of  the  loss  and  gain  statement  show? 

35.  What  does  the  second  section  of  the  loss  and  gain  statement  show? 

36.  If  there  are  outside  speculations,  what  furlher  closing  would  be  necessary? 

37.  In  making  a  statement  of  resources  and  liabilities,  where  would  you  find  the  cash 
on  hand  ? 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


103 


SPECIAL    INSTRUCTIONS, 

The  transactions  for  the  month  of  June  call  for  the  handling  of  drafts,  and  the  business 
of  the  month  is  a  continuation  of  that  of  the  month  of  May,  with  the  addition  of  groceries 
to  the  tea,  coffee  and  spices  dealt  in  during  that  period.  Jt  is  thought  advisable  to  give 
space  for  a  short  discussion  of  the  subject  of  drafts  before  the  student  is  called  upon  to 
handle  that  form  of  commercial  paper  in  his  vouchers. 


DRAFTS. 

A  draft  is  an  order  from  one  person  or  firm  to  another  to  pay  a  certain  sum  of  money, 
unconditionally,  to  some  person  or  firm  named  in  the  bodj^  of  the  draft,  or  to  the  order  of 
that  person  or  firm. 

Form  op  Sight  Draft. 


^Se^ 


-^-  y/^ 


Stmmbe^ .  Allen  i  Ca.Statianers  Ourago.Hl 


In  the  above  draft  Chas.  Rand  orders  Wm.  French  to  pay  to  the  order  of  Adams  & 
Baker  $300.  It  is  presumed  that  Wm.  French  owes  Chas.  Rand  this  amount,  and  that 
Chas.  Rand  is  indebted  to  Adams  &  Baker,  and  gives  them  this  order  on  Wm.  French  in 
payment  of  his  indebtedness. 

PARTIES  TO   A   DRAFT. 

Drawer. — This  name  is  given  to  the  person  who  writes  or  draws  the  draft.  In  the 
form  of  draft  given  above  the  drawer  is  Chas.  Rand. 

Payee. — This  name  is  given  to  the  person  or  firm  to  whom  the  draft  is  made  payable. 
In  the  form  of  draft  given  the  payees  are  Adams  &  Baker. 

Drawee. — This  name  is  given  to  the  person  or  firm  on  whom  the  draft  is  drawn.  In 
the  preceding  form  Wm.  French  is  the  drawee. 

COURSE  OF   PROCEDURE  WHEN  A  DRAFT   IS  DRAWN. 

Chas.  Rand  owes  Adams  &  Baker  and  wishes  to  pay  them  $300  on  account.  Wm. 
French  owes  Chas.  Rand  and  is  willing  to  pay  to  him,  or  to  his  order,  $300,  therefore  the 


104 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


following  transaction  is  carried  out :     Chas.  Rand  writes  an  order,  or  draws  a  draft,  on 

Wm.  French,  requesting  him  to  pay  to  the  order  of  Adams  &  Baker  $300. 

The  drawer  should,  in  every  case,  notify  the  drawee  that  he  has  drawn  on  him;  or,  better  still,  notify 
him  in  advance  that  he  will  draw  on  him  at  a  certain  date,  for  no  person,  even  though  he  be  a  debtor,  is 
obliged  to  accept  or  pay  a  draft  drawn  on  him  by  a  creditor. 

Having  drawn  the  draft,  Rand  gives  it  to  Adams  &  Baker  and  makes  his  journal 
entr}',  since  the  transaction  is  completed  so  far  as  he  is  concerned.  Rand  has  given 
Adams  &  Baker  the  order,  which  will  be  worth  $300  to  them  when  presented  to  Wm. 
French  for  payment;  therefore,  Adams  &  Baker  should  be  debited  $300,  the  amount  they 
will  be  paid.  This  amount,  $300,  will  be  paid  by  French,  therefore  Frc7ich  should  be 
credited  the  same  as  if  he  had  paid  the  amount  to  Rand  instead  of  to  the  person  Rand 
designated  in  the  draft. 

The  following  is  the  form  of  journal  entry  required  in  the  drawer's  books  for  the 
above  draft. 


/^^^i^W^^e<:/ >^?=^P^.^C,^^  =.<^ 


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Rule  1. —  The  drawer' s  entry  when  a  draft  with  three  parties  is  drawn,  whether  it  be  at 
sight  or  a  time  draft,  is  Payee,  Dr.  and  Drawee,  Cr. 

Payee's  Entry. — The  payees,  Adams  &  Baker,  receive  the  draft  from  Chas.  Rand, 
and  they  at  once  take  it  to  Wm.  French,  or  place  it  in  their  bank  for  collection,  in  which 
case  the  bank  will  take  it  to  French,  who  pays  the  $300.  In  either  case  Adams  &  Baker 
have  received  cash,  $300,  and  should  debit  Cash.  The  draft  which  produced  them  the 
$300  was  received  from  Chas.  Rawd,  therefore  Chas.  Rand  should  l)e  credited  the  same  as 
if  he  had  given  them  the  $300. 

The  following  should  be  the  payees'  entry  on  the  debit  side  of  their  book. 


Rule  2. —  The  payee' s  entry  for  a  sight  draft  received  should  be  Cash, Dr. and  Drawer, Cr. 

I>rawee'(s  l-^iitiy. — When  the  draft  is  presented  to  Wm.  French  he  examines  it  and 
notes  that  Chas.  Rand  has  requested  him  to  pay  ^^300  to  the  order  of  Adams  &  Baker, 
and  if  he  honors  the  draft  he  pays  the  amoinit,  $300,  and  since  he  pays  this  amount  on 
Chas.  Rand's  order,  he  delnts  Ratid  the  same  as  if  he  had  paid  the  ca.sh  direct  to  him  and 
credits  Cash,  since  he  has  paid  it  out. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


105 


The  following  is  the  drawee' s  entry  for  the  above  draft  on  the  credit  side  of  his  cash 
book. 


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Rule  3. — Drawee' s  entry  for  a  sight  draft  paid  is  Drawer,  Dr.  and  Cash,  Cr. 

ExAMPtE. — Edward  Martin  draws  a  sight  draft  on  B.  W.  Hammond,  requesting  him 
to  pay  to  the  order  of  Chas.  Carter  $400,  which  he  does.  Write  the  draft  and  make  the 
entry  of  each  party  to  the  transaction.  Write  the  draft  and  the  entries  on  a  piece  of 
foolscap  paper,  and  show  it  to  your  teacher. 

Form  op  Time  Draft. 


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In  the  above  draft  instead  of  being  payable  at  sight,  it  is  not  payable  until  30  days 
after  its  date,  or  July  2.  This  draft,  as  soon  as  received  by  the  payee,  Edward  Curtis, 
should  be  taken  to  the  drawee,  D.  H.  Parsons,  who,  if  he  decides  to  pay  it,  will  write 
Accepted  across  the  face,  with  his  name.  This  is  generally  done  in  red  ink,  though  the 
color  of  the  ink  is  unimportant.  In  the  case  of  this  draft,  the  drawer's  entry  will  be  the 
same  as  in  the  case  of  the  sight  draft,  for  the  payee  has  received  value,  and  should  there- 
fore be  debited,  while  the  drawee  is  to  pay  the  draft  when  it  falls  due,  and  should  therefore 
be  credited.  The  payee,  however,  instead  of  receiving  cash  from  the  drawee.  Parsons, 
has  received  a  promise  to  pay  in  30  days,  for  writing  the  w^ord  "Accepted,"  and  signing 
the  name  across  the  face  of  a  draft  constitutes  at  law  a  promise  to  pay.  A  promise  to 
pay  is  a  bill  receivable  to  the  holder,  therefore  his  entry  should  be  as  follows. 


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106 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Rule  4. —  The  payee' s  entry  for  a  time  draft  accepted  is  Bills  Receivable,  Dr.  and 
Drawer,  Cr. 

When  this  draft  is  presented  to  D.  H.  Parsons,  and  he  writes  Accepted,  D.  H.  Parsons, 
across  its  face,  he  agrees  to  pay  it  in  30  days,  and  the  draft  at  once  becomes  a  bill  payable 
to  him.  He  should  debit  M.  F.  Archer,  since  it  is  for  him  he  has  assumed  this  obligation, 
and  should  credit  Bills  Payable,  since  he  has  agreed  to  pay  $900  in  30  days,  or  on  July  2. 
The  following  should  be  Parson's  entrj^  when  he  accepts  the  draft. 


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Rule  5. —  The  di'awee' s  ejitry  for  a  time  draft  is  Drawer,  Dr.  and  Bills  Payable,  Cr. 

ExAMPivE. — Geo.  W.  Allen  draws  a  draft  on  Chas.  W.  Clinton  for  $500,  at  45  days' 
sight,  in  favor  of  P.  Y.  Black.  Write  the  draft  as  accepted  by  Chas.  \\'.  Clinton,  and 
make  the  journal  entry  of  each  party  to  the  transaction. 

The  draft  is  used  extensively  in  business  for  the  purpose  of  collecting  accounts  that 
are  past  due,  and  instead  of  the  promissory  note  in  ordinary  sales  of  merchandise.  In 
these  cases,  the  draft  is  made  payable  to  the  order  of  the  drawer,  and  is  generally  collected 
through  his  bank.     The  following  are  forms  of  sight  and  time  drafts  drawn  in  this  manner. 

Form  op  Sight  Draft. 


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MODERN    ILLUSTRATIVE    BOOKKEEPING. 


107 


Form  op  Time  Draft. 


Rule  G. —  T/ie  drawer's  entry  is  the  same  as  the  payee' s,  since  he  is  payee  as  well  as 
drawer;  that  is,  in  the  sight  draft  he  will  debit  Cash  a^id  credit  E.  M.  Leach,  while  in  the 
time  draft  he  will  debit  Bills  Receivable  and  credit  E.  B.  Lacy  &  Co. 

ExAMPi.ES. — J.  B.  Flint,  of  Rochester,  N.  Y.,  draws  a  draft  at  sight,  in  favor  of  him- 
self, on  A.  H.  Hines,  of  Portland,  Me.,  for  $250,  and  deposits  it  in  his  bank.  Write  the 
draft  and  the  entries  of  J.  B.  Flint  and  A.  H.  Hines. 

J.  B.  Flint  of  Rochester,  N.  Y.,  has  drawn  a  draft  for  $300,  at  30  days'  sight,  in  favor 
of  himself,  on  J.  L.  Osborn,  of  Manchester,  N.  H.  Write  the  draft,  properly  accepted, 
and  make  the  journal  entries  of  J.  B.  Flint  and  J.  L.  Osborn. 


BANK    DRAFT. 

In  business  a  large  proportion  of  remittances  are  made  bj'  means  of  bank  drafts,  which 
are  accepted  as  cash.     The  following  is  a  form  of  bank  draft. 

Form  of  Bank  Draft. 


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108  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

A  bank  draft,  it  will  be  seen,  is  an  order  from  one  bank  on  another,  requesting  the 
payment  of  a  sum  of  money,  unconditionally,  to  some  person  or  firm  named  in  the  body 
of  the  draft.  These  drafts  can  be  purchased  at  any  bank  for  a  small  sum  in  excess  of  the 
amount  for  which  they  are  WTitten.  It  is  the  custom  of  every  bank  to  keep  on  deposit  a 
certain  amoimt  at  some  bank  in  the  commercial  center  nearest  to  its  place  of  business. 
For  instance,  all  banks  in  the  eastern  states  will  have  a  deposit  with  some  bank  in  Boston; 
all  banks  in  the  middle  west,  with  some  bank  in  Chicago;  all  banks  in  the  southwest,  with 
some  bank  in  St.  L,ouis;  all  banks  on  the  Pacific  coast,  with  a  bank  in  San  Francisco;  and 
all  the  leading  banks  in  the  United  States  wall  have  a  deposit  with  some  bank  in  New 
York,  since  New  York  is  the  commercial  center  of  the  United  S^'ates. 

In  the  case  of  the  draft  shown  in  the  illustration,  let  us  suppose  that  Emerson  Bros, 
of  St.  Louis,  Mo.,  wish  to  send  the  Eastman  Kodak  Co.  of  Rochester,  N.  Y.,  $590.50, 
to  pay  for  an  order  of  goods  to  be  shipped  at  once.  If  the  Eastman  Kodak  Co.  are  not 
acquainted  with  Emerson  Bros.,  they  would  probably  hesitate  to  accept  their  personal 
check  for  so  large  an  amount  as  $590.50,  and  would  delaj^  shipment  of  the  goods  until 
they  found  out  whether  the  check  was  good  or  not;  therefore,  Emerson  Bros,  make  out  a 
check  like  the  followine. 


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Form  of  Check. 


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Emerson  Bros,  take  the  above  check  to  the  Traders  Bank  of  St.  Louis.  The  bank 
will  charge  a  small  fee  for  exchange  (in  this  case  50'/),  which  is  included  in  Emerson 
Bros.'  check,  and  will  make  out  a  draft  similar  to  the  form  on  page  107.  Some  business 
houses  have  these  remittance  drafts  made  payable  to  the  order  of  the  person  to  whom 
they  are  to  be  sent,  but  the  better  way  is  to  have  the  draft  made  payable  to  the  order  of 
the  sender,  who  will  indorse  it  over  to  the  order  of  the  person  to  whom  it  is  sent.  When 
this  is  done,  the  draft  itself,  after  it  has  been  presented  and  paid,  becomes  a  perfect  receipt 
for  the  amount  named  in  its  face.  In  this  case,  the  draft  would  be  accepted  as  cash  by 
the  Eastman  Kodak  Co.,  and  they  would  place  it  as  a  deposit  in  their  bank  in  Rochester. 
This  bank  would  forward  the  draft  to  the  bank  with  which  it  does  business  in  New  York, 
and  it  would  be  presented  to  the  Seaboard  National  Bank  of  that  city,  and  that  bank 
would  pay  it  and  charge  it  to  the  Traders  Bank  of  St.  Louis.  The  following  shows  the 
draft  properly  indorsed. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


109 


Form  of  Indorsement. 


WORK    FOR    THE    STUDENT. 


In  the  following  exercises  it  is  required  that  the  student  write  each  draft,  with  such 
indorsements  or  acceptance  as  it  should  bear,  on  foolscap,  and  make  his  journal  and  cash 
book  entries  on  a  sheet  of  joiu-nal  paper. 

If  the  teacher  deems  it  advisable,  he  may  require  the  student  to  make  the  journal  and 
cash  book  entries  of  all  parties  to  these  drafts. 

June  i. — Emmons,  Hyde  &  Co.,  of  Chicago,  111.,  have  agreed  to  accept  3"our  draft  at 
sight  for  $600,  favor  of  E.  L.  Martin.  Write  the  draft  and  make  the  proper  entrj^  (see 
rule  I,  page  104). 

June  2. — Geo.  C.  Chase,  Manchester,  N.  H.,  has  agreed  to  accept  your  draft  for  $275 
at  10  daj-s'  sight,  in  favor  of  Wm.  Darling  &  Co.  Write  the  draft  and  make  the  proper 
entr}^  (see  rule  i,  page  104). 

June  3. — S.  A.  Dodge  &  Co.,  Millbury,  Mass.,  have  accepted  your  draft  for  $800  at 
60  days  after  date,  in  favor  of  yourself.  Write  the  acceptance  and  make  the  proper  entry 
(see  riile  6,  page  107). 

June  4. — John  Reynolds  &  Co.,  St.  Louis,  Mo.,  have  agreed  to  accept  j-our  draft  for 
$250  at  sight,  in  favor  of  yourself.  Place  the  draft  in  the  bank  and  receive  credit  for 
its  face.  Write  and  correctly  indorse  the  draft  and  make  the  proper  cash  book  entry  (see 
rule  6,  page  107). 


110  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

June  5. — O.  H.  Waters,  Boston,  Mass.,  has  agreed  to  accept  your  draft  for  $1200  at 
four  months  after  date,  favor  of  yourself.  Write  the  draft  and  have  it  discounted  at  the 
College  Bank  and  the  net  proceeds  placed  to  your  credit.  Alake  the  proper  cash  book 
entry. 

Prepare  a  discount  slip,  treating  the  draft  exactly  as  you  would  a  four  months'  note 
of  a  similar  amount  and  date. 

For  the  above  transaction,  some  bookkeepers  would  make  a  journal  entry,  debiting 
Bills  Receivable  (see  rule  6,  page  107)  and  crediting  O.  H.  Waters,  after  which  they 
would  make  a  cash  book  entry,  debiting  Cash  and  crediting  Bills  Receivable ;  also  crediting 
Cash  and  debiting  Discount  for  the  discount.  But  the  journal  entry  is  unnecessary',  since 
the  bill  receivable  does  not  remain  in  yoxxr  possession.  The  better  method  would  be  to 
debit  Cash  for  the  amount  of  the  draft  and  credit  O.  H.  Waters  in  the  cash  book,  writing 
draft  at  ^f  mos.  in  the  second  explanation  column  of  the  cash  book;  then  credit  Cash  and 
debit  Discowit,  writing  O.  H.  Waters  draft,  ^  mos.  in  the  second  explanation  column  on 
the  credit  side  of  the  cash  book. 

June  6. — Wm.  Parsons  &  Co.,  Worcester,  Mass.,  have  drawn  on  you  at  sight  through 
the  College  Bank,  for  $650.  You  accept  the  draft,  payable  at  College  Bank,  where  you 
have  a  deposit.  Write  the  draft  and  acceptance  and  make  the  proper  cash  book  entry 
(see  rule  3,  page  105). 

June  8. — T.  W.  Preston,  Toledo,  Ohio,  has  drawn  a  draft  on  you,  dated  June  5th,  at 
30  days  after  sight,  favor  of  himself,  for  $200.  Accept  the  draft,  payable  at  your  office, 
and  make  the  proper  entry  (see  rule  5,  page  106). 

June  8. — Ward  Bros.,  El  Paso,  Texas,  who  owe  you  on  account,  draw  a  sight  draft 
on  Thomas  Trajaior  &  Co.,  Buffalo,  N.  Y.,  in  your  favor,  for  $300,  and  you  place  the 
draft  in  the  bank  with  your  daily  deposit,  receiving  credit  for  its  face.  Write  and  indorse 
the  draft  and  make  the  proper  entry  (see  rule  2,  page  104). 

June  9. — Fred  Kemble  &  Co.,  Concord,  N.  H.,  owe  you  on  account,  and  they  give 
you  a  draft  at  ten  days  from  date,  for  $4000,  on  A.  B.  Collins,  Pittsburg,  Pa.,  to  apply 
on  account,  which  you  accept  at  its  face  and  place  in  your  bank  for  collection.  Write 
the  draft  with  the  proper  indorsements,  and  make  the  journal  entry  (see  rule  4,  page  106). 

June  10. — You  owe  Chas.  Farnham  &  Co.  $510  on  account,  and  you  give  them  a  sight 
draft  on  H.  A.  Bowen,  Portsmouth,  N.  H.,  for  the  amount.  Write  the  draft  and  make 
the  proper  entry  (see  rule  i,  page  104). 

June  II. — You  owe  O.  D.  Byron  $240  on  account,  and  in  payment  you  give  him  a 
draft  on  C.  P.  Larcum,  Syracuse,  N.  Y.,  at  10  days  after  date  for  this  amount.  He 
accepts  the  draft  at  its  face.     Write  the  draft  and  make  the  proper  entry  (see  rule  i). 

June  12. — Geo.  Farrish  &  Co.,  who  are  indebted  to  j'ou,  indorse  over  to  you  a  draft 
drawn  by  them,  in  their  favor,  on  Amos  Martin,  Philadelphia,  Pa.,  for  $485,  dated  June 
ist,  at  four  months  from  date,  accepted  by  Martin.  You  receive  the  draft  and  give  Far- 
rish &  Co.  credit  for  its  face,  less  discount  at  6 ,'  for  the  unexpired  time.  Write  the  draft 
with  indorsements  and  make  the  proper  entry.  (Find  the  due  date  of  the  draft,  and 
discount  it  for  the  time  between  June  12th  and  the  due  date. ) 

June  13. — You  have  in  your  possession  a  draft  drawn  l)y  yourself,  June  41I1,  on  J.  C. 
Dennis  &  Co.,  Brooklvn,  for  $915,  at  90  days  from  date,  and  accepted  In  J.  C.  Dennis  ^S: 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  Ill 

Co.  You  indorse  this  acceptance  over  to  J.  L.  Osborn  &  Co.,  who  allow  you  its  face,  less 
discount  at  6  ,  for  the  unexpired  time.  Write  and  indorse  the  draft  and  make  the  proper 
entry.      (Find  due  date  and  discount  for  unexpired  time.) 

JUNE^  14. — You  have  the  draft  of  S.  A.  Dodge  &  Co.,  received  June  3d,  discounted 
at  the  College  Bank,  and  the  net  proceeds  placed  to  your  credit.  Make  the  proper  cash 
book  entry. 

Hand  the  journal  sheet  containing  the  above  entries,  and  the  drafts  which  you  have 
written,  to  your  teacher  for  examination.  Be  sure  you  understand  each  transaction  before 
proceeding. 

NEW    BOOKS  TO    BE    USED. 

In  this  month's  work  you  will  use,  in  addition  to  the  books  already  in  use,  the  invoice 
book  and  the  bill  book. 

Bill  Book. — This  book  contains  a  Hst  and  a  brief  description  of  all  notes  which  come 
into  the  business  or  which  are  given  by  the  business.  When  notes  are  received  or 
given,  the  information  called  for  should  be  vs^itten  under  the  proper  headings,  as  shown 
in  the  bill  book  (see  model,  page  112).  This  model  contains  the  proper  entries  for  all 
notes  received  and  given  during  the  month  of  May.  You  may  copy  the  entries  found  in 
the  model  bill  book  into  your  bill  book  exactly  as  they  appear  in  the  model.  Your  bill 
book  will  then  show  all  notes  on  hand  and  outstanding  at  the  beginning  of  the  month  of 
June. 

Invoice  Book. — This  book  is  generally  made  up  of  the  original  bills  themselves  which 
are  pasted  in  the  invoice  book,  as  shown  in  the  model  on  page  113,  and  the  amount  of  each 
invoice  is  carried  into  the  money  column  of  the  invoice  book,  also  shown  in  the  model. 
WTien  bills  are  received,  after  they  have  been  O.  K.'d,  paste  them  in  your  invoice  book, 
taking  care  that  the  right-hand  edges  of  the  bill  do  not  extend  into  the  money  column 
of  the  invoice  book.  In  order  to  avoid  this,  it  may  be  necessary  to  trim  the  edges  of 
some  of  the  bills,  for  invoices  coming  from  different  business  houses  will  not  be  of  miifomi 
size.  Paste  lightly  on  the  lower  edges  of  the  invoice  and  let  them  lap  over  each  other, 
as  shown  in  the  model. 

It  will  be  seen  that  the  money  column  of  the  invoice  book  should  contain  the  amount 
of  all  merchandise  bought  by  the  business,  and  therefore  the  footing  of  this  money  column 
should  be  the  debit  of  the  IMerchandise  account.  It  will  no  longer  be  necessary  to  enter 
merchandise  purchases  in  the  journal,  but  at  the  end  of  the  month,  or  at  such  periods  as 
may  be  desired,  the  footing  of  the  money  column  of  the  invoice  book  should  be  carried 
to  the  debit  side  of  the  Merchandise  account,  and  the  page  of  the  invoice  book  carried  to 
the  folio  column  of  the  ledger,  and  opposite  the  footing  in  the  invoice  book  should  be 
written  the  ledger  page  of  the  Merchandise  account.  The  amount  of  each  bill  should  be 
posted  directly  from  the  invoice  book  to  the  credit  of  each  person  or  firm  from  whom  the 
merchandise  is  purchased,  and  the  page  of  the  account  in  the  ledger  should  be  -uTritten 
on  the  invoice  itself,  as  shown  in  the  model  on  page  113. 


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113 


11-1  MODERX    ILLUSTRATIVE    BOOKKHEnXG. 

ARTICLES   OF   COPARTNERSHIP. 

Articles  of  Copartnership,  made  the  first  day  of  June,  one  thousand  nine  hundred, 
between  J'.  B.  Lamson,  of  Manchester,  N.  H.,  of  the  first  part,  and  Frank  \\\  (xarland, 
of  Boston,  Mass.,  of  the  second  part,  witnesseth  as  follows: 

Whereas,  the  parties  hereunto,  having  mutual  confidence  in  each  other,  do  this  day 
form  with  each  other  a  copartnership  under  the  firm  name  of  J.  B.  Lamson  &  Co.,  for  the 
purpose  of  conducting  a  wholesale  business  in  tea,  coffee,  spices  and  general  groceries,  at 
241  Chestnut  St.,  Manchester,  N.  H.,  under  the  following  terms  and  conditions,  to  wit: 

First.  That  the  said  J.  B.  Lamson  of  the  first  part  shall  contribute  the  entire  resources 
of  his  late  business  located  at  241  Chestnut  St.,  ^Manchester,  N.  H.,  as  shown  by  the  state- 
ment prepared  ]\Ia3"  31,  1900,  less  the  liabilities,  as  shown  b}-  his  statement  of  liabilities 
prepared  on  the  same  date,  which  liabilities  are  to  be  paid  by  the  firm  of  J.  B.  Lamson  & 
Co.     The  total  net  investment  of  J.  B.  Lamson,  as  shown  by  these  statements,  is  $7245. 

Second.  The  said  Frank  W.  Garland  of  the  second  part  shall  contribute  cash  to  the 
amount  of  $7245. 

Third.  The  capital  so  formed  is  to  be  used  and  enjoyed  in  common  between  them  for 
the  prosecution  and  management  of  said  business,  to  their  mutual  benefit  and  advantage. 

Fourth.  Both  parties  shall  deVote  their  entire  time  to  the  business,  and  shall  share  gains 
and  assets  equally,  and  bear  losses  equally.  J.  B.  Lamson  is  entitled  to  draw  a  salary  of 
$125  per  month,  and  Frank  W.  Garland  is  entitled  to  draw  a  salar)'  of  $100  per  month 
from  the  funds  of  the  business. 

Fifth.  The  said  J.  B.  Lamson  hereby  guarantees  that  all  notes  and  personal  accounts 
due  J.  B.  Lamson,  and  invested  by  him  in  the  firm  of  J.  B.  Lamson  &  Co.,  shall  be  worth 
their  face  value,  less  any  regular  trade  discounts  to  which  they  may  be  entitled. 

In  IVitness  Whereof,  the  parties  hereto  have  hereunto  set  their  hands  and  seals,  in 
duplicate,  the  day  and  year  first  above  written. 

J.  B.  Lamson.  [l.  s.] 

Signed,  sealed  and  dehvered  \  Frank  W.  Garland,      [l.  s.] 

in  the  presence  of  J 

F.  W.  Earl. 

WORK   FOR  THE    STUDENT. 

June. 

Xo.  07. — ^JuNE  I.  H.  F.  Adams  is  desirous  of  adding  a  line  of  standard  groceries  to 
the  Tea,  Coffee  and  Spice  business  in  which  he  is  now  engaged.  Not  having  suflicient 
capital  to  carry  on  the  lousiness  alone,  he  has  sold  to  yow  a  one-half  interest  in  his  business 
for  a  sum  equal  to  his  net  worth  at  the  close  of  the  month  of  May. 

Mr.  Adams  is  to  do  all  the  buying  for  the  new  firm  and  also  to  sjK-nd  a  part  of  his 
time  as  traveling,  or  outside,  salesman,  while  you  are  to  take  full  charge  of  the  books 
and  attend  to  the  pa>inent  of  bills,  make  all  notes,  checks,  drafts  and  other  negotiable 
paper  of  the  firm,  and  attend  to  the  management  of  the  store. 

The  gains  and  losses  of  the  l)usiness  are  to  be  shared  c(iuall\ .  iCacli  parliicr  is  to  gi\-e 
his  full  time  to  the  business,  and  H.  F.  Adams  is  to  draw  a  salary  of  $125  per  inonili  and 
you  a  salary  of  $100  per  month.     The  firm  name  is  to  be  TL  I'\  Adams  iS:  Co. 


MODERX    ILLUSTRATIVE    BOOKKEEPING. 


11, 


Prepare  articles  of  copartnership  between  the  two  partners,  yourself  and  H.  F.  Adams, 
(see  model,  page  114).  For  amount  of  investment,  see  H.  F.  Adams's  present  worth, 
statement  May  3 1 .  Present  this  copy  to  your  teacher  for  approval,  and  make  such  changes 
as  he  may  suggest.  Copy  carefully,  in  ink,  on  legal  cap,  the  corrected  articles  of  copart- 
nership and  present  to  3*our  teacher,  who  will  sign  for  H.  F.  Adams.  Sign  your  own 
name  below  that  of  H.  F.  Adams,  and  afhx  seals.  Ask  some  student,  or  your  teacher, 
to  sign  as  witness  in  the  left-hand  corner  opposite  the  names  of  yourself  and  H.  F.  Adams. 

In  business  two  copies  should  be  prepared,  one  for  each  partner,  and  a  lawyer  experienced  in 
partnership  affairs  should  prepare  these  articles  of  copartnership. 

Fold  the  articles  of  copartnership  twice  from  bottom  to  top,  and  brief  them  by  writing 
on  the  outer  right-hand  corner  at  the  top  the  following: 


Articles  of  Copartnership 

between 

H.  F.  Adams 

and 

{^StudcnV s  Namc^ 

Jiuie  I,  igo— 


Xo.  68. — June  I.  Procure  from  your  teacher  $200  in  cash  and  check  for  the  balance 
of  50ur  investment,  which  will  be  the  same  as  H.  F.  Adams's  present  worth  at  the  end  of 
May.  Enter  the  amount  in  the  cash  book  on  first  line  below  the  balance  for  June  i ,  cred- 
iting yourself  for  investment. 

Write  a  check  in  favor  of  H.  F.  Adams  &  Co.  for  the  amount  of  H.  F.  Adams' s  balance 
in  Commercial  Bank,  as  shown  by  the  stub  of  your  check  book.  Deposit  this  check  -and 
check  received  from  teacher.  You  will  no  longer  sign  or  indorse  checks  and  other  nego- 
tiable paper  with  your  name  as  attorney,  for  you  are  now  a  member  of  the  firm  of  H.  F. 
Adams  &  Co.,  and  have  the  same  right  to  sign  checks  and  other  papers  that  Mr.  Adams 
has;  but,  in  order  that  your  teacher  may  be  able  to  identify  your  work  readil}-,  j-ou  will 
write  your  own  name  under  that  of  H.  F.  Adams  &  Co.  on  all  paper  you  may  have  occa- 
sion to  indorse  or  sign. 

No.  09. — June  I.  You  will  pay  H.  F.  Adams's  gas  bill  for  the  month  of  May,  S7.87. 
This  bill  belongs  to  last  month's  business,  but  it  has  been  agreed  that  such  bills  as  did 
not  appear  on  the  books  shall  be  paid  by  the  new  firm  when  due. 

Write  a  check  for  the  amount  and  place  the  receipted  bill  in  your  Voucher  File.  Place 
the  check  in  Cash  Paid  Out.     Make  the  proper  entry  in  your  cash  book. 

,     Xo.  70. — June  3.     This  transaction  calls  for  an  invoice  of  merchandise  purchased. 

Examine  the  invoice  and  see  that  it  is  correct.  If  found  to  be  correct,  paste  the  invoice 
in  your  invoice  book  and  write  the  amount  of  the  invoice  in  the  money  column  of  the 
invoice  book  (see  model,  page  113).  No  journal  entry  is  required  for  this  transaction 
for,  as  explained  under  ' '  Invoice  Book, ' '  page  1 1 1 ,  all  postings  are  made  directly  from  the 
iiTvoice  book. 


116  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

No.  71. — June  3.  This  transaction  is  similar  to  No.  70  and  should  be  treated  in  tLe 
same  manner. 

Examine  the  invoice  and  see  that  it  is  correct;  if  so,  then  paste  it  in  the  invoice  book 
and  enter  the  amount  in  the  money  column  of  the  invoice  book. 

No.  72. — ^JuNE  4.  You  now  take  out  a  policy  of  insurance  on  your  stocK  of  mer- 
chandise for  $3000  at  ifc  premium. 

Make  a  check  for  the  amount  in  favor  of  the  Equitable  Fire  Insurance  Co.  Place  it  in 
youi'  Cash  Paid  Out  envelope.  Place  the  policy  in  your  Voucher  File,  and  make  the 
proper  cash  book  entry  (see  transaction  No.  30,  page  82). 

No.  73. — June  4.  You  have  outstanding  a  note  in  favor  of  L.  Hennes  &  Co.,  for 
$1505,  which  is  due  60  days  after  date,  May  2d.     This  note  will  fall  due  July  ist. 

As  you  have  money  in  the  bank  which  you  do  not  need  to  use  in  your  business  at 
present,  you  may  pay  this  note.  It  is  the  custom  in  business  to  allow  discount  for  the 
unexpired  time  on  all  notes  paid  before  due.  You  will  therefore  take  the  note  from  Bills 
Payable  File  and  calculate  the  discount  on  its  amount  for  the  time  which  it  still  has  to 
run  (from  June  4th  to  July  ist  =  27  days).  Subtract  the  discount,  $x.xx,from  the  amount 
of  the  note,  and  write  a  check  for  the  balance.  Place  the  check  in  Cash  Paid  Out,  and 
write  Paid,  June  4.,  190-,  across  the  face,  and  place  the  canceled  note  in  your  \"oucher 
File.  This  transaction  calls  for  a  cash  book  entry.  Credit  Cash  for  the  full  amount  of 
the  note,  and  debit  Cash  for  the  amount  of  the  discount.  In  your  bill  book  under  Wheti 
and  How  disposed  of  place  150^  in  the  Amount  column,  Jine  /  in  the  Date  column,  and 
Discotmted  in  the  Explanation  column. 

Form  of  Notification  of  Draft.  . 

Rome,     N.     Y.  ,     June    1,     190    . 

Messrs.  White,  Smith  &  Perry, 

262  Brown  St.  , 

Providence,  R.   I. 
Gentlemen, -- 

We  have  this  day  drawn  upon  you  at  sight,  in  favor  of 

A.  V.  Jackson  &  Co.  ,  for  $225.   Please  honor  the  draft 

and  oblige 

Yours  truly, 

Williams  &  Raymond. 

W. 

No.  74. — June  5.  You  may  draw  at  sight  on  Rice  &  Pond,  of  Georgetown,  for  $265, 
which  is  the  amount  you  owe  E.  Westen  Tea  &  Spice  Co.,  to  balance  the  account  of  May 
7th. 

Write  the  draft,  following  the  model  on  page  103.  Enclose  it  with  a  letter  of  remit- 
tance properly  addressed  to  V,.  Westen  Tea  «S:  Spice  Co.  (see  model,  i>age  86).  Write  a 
letter  to  Rice  &  Pond,  notifying  them  that  >'ou  liave  drawn  <>n   llieni  at  siglit   for  $265, 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  117 

and  request  them  to  honor  the  draft  (see  model,  page  1 16).     Referring  to  rule  i,  page  104, 
make  your  journal  entr}-.     Place  both  letters  in  your  Vouchers  for  Others. 

No.  75. — June  5.  F.  C.  Tenney,  who  lives  in  your  city,  has  agreed  to  accept  your 
draft  at  sight  for  $90,  in  favor  of  C.  K.  Fox,  who  also  lives  in  your  city. 

This  transaction  is  similar  to  No.  74.  Write  the  draft  and  place  it  in  Vouchers  for 
Others.  Make  your  jotu-nal  entry  as  in  No.  74.  Why  do  you  make  C.  K.  Fox  Dr.  ? 
Why  do  you  make  F.  C.  Temiey  Cr.  ? 

No.  70. — June  5.  This  order  has  been  received  from  your  Mr.  Adams,  and  A.  W. 
McKey  agrees  to  accept  a  draft  at  30  days  from  the  date  of  the  sale. 

Using  the  model  on  page  105  as  a  form,  draw  a  draft  at  30  days  for  the  net  amount  of 
the  bill,  as  shown  in  the  right-hand  column  of  your  sales  book.  Do  not  write  Accepted 
across  the  face,  but  take  the  draft  to  your  teacher,  or  to  the  person  appointed  to  attend 
to  such  paper,  and  if  correct,  he  will  write  Accepted,  with  the  name  A.  W.  McKey, 
across  the  face  of  the  draft.  When  he  has  done  so,  place  the  accepted  draft  in  3'our 
Cash  Drawer.  Make  the  proper  journal  entry.  What  account  should  be  debited,  and 
why?     What  account  should  be  credited,  and  why?     (See  rule  6,  page  107.) 

Make  a  bill  of  the  goods  ordered,  checking  off  each  item  on  the  saleman's  order.  Enter 
the  sales  in  your  sales  book,  deducting  i"*^,  and  place  the  bill  in  your  Vouchers  for  Others. 

No.  7  7. — June  6.  This  is  also  a  salesman's  order  from  a  citj^  customer,  and  calls  fgr 
a  3*^  discount  for  payment  by  ten-day  acceptance. 

Fill  the  order,  verify  your  calculations,  and  enter  in  your  sales  book,  deducting  ^/i. 
Draw  a  ten-day  draft  on  F.  C.  Tenney  for  the  net  amount  of  the  bill  and  take  it  to  your 
teacher  for  approval.  If  the  draft  is  correct,  he  will  accept  it  for  F.  C.  Tenne5\  Place 
the  draft  in  your  Cash  Drawer  and  make  the  proper  journal  entry.  This  transaction  is 
similar  to  No.  76. 

No.  78. — June  6.  This  invoice  has  been  purchased  by  Mr.  Adams,  who  has  agreed 
to  accept  a  draft  at  10  days,  and  the  draft  ready  for  acceptance  accompanies  the  invoice. 

See  that  the  invoice  is  correctly  made,  and  if  the  amount  is  right,  then  write  across 
the  face  of  the  draft,  in  red  ink,  Accepted,  payable  at  Commercial  Bank,  with  the  date, 
June  6,  1 90-,  and  sign  the  name,  H.  F.  Adams  &  Co.  Place  the  draft  thus  accepted  in 
your  Bills  Payable  File,  after  you  have  entered  it  in  5'our  bill  book. 

Paste  the  invoice  in  your  invoice  book,  and  at  the  proper  time  you  will  post  it  from 

this  book  to  the  debit  of  Merchandise  and  to  the  credit  of  West,  Stone  &  Co.      Make  a 

journal  entry,  debiting    West,   Stone  &  Co.   for  the  amount  of  the  acceptance.      What 

account  should  be  credited,  and  why?     (See  rule  16,  page  30.) 

Some  bookkeepers  would  post  direct  from  the  invoice  book  to  the  credit  of  Bills  Payable,  but  if  this 
is  done  the  ledger  will  not  show  how  much  business  you  have  done  with  West,  Stone  &  Co.,  and  it  is 
believed  this  information  is  worth  more  than  the  trifling  addition  of  time  required  to  post  to  the  credit 
of  West,  Stone  &  Co.  from  the  invoice  book,  and  then  post  back  to  their  debit  from  the  journal. 

No.  79. — June  7.  This  order  has  been  taken  by  Mr.  Adams,  who  has  received  a 
check  for  $600,  to  apply  on  account. 

No  receipt  is  required.  Fill  the  order,  checking  off  each  item.  Verify  3'our  calcula- 
tions and  enter  in  the  sales  book.  Place  the  check  in  your  Cash  Drawer,  and  make  the 
proper  entry  in  your  cash  book. 


118  MODERN    ILLUSTRATIVE    BOOKKEEPIXC. 

No.  SO. — June  7.  Deposit  in  your  bank  the  check  received  from  A.  A.  Knowles  & 
Co.,  and  have  the  two  acceptances  received  June  5th  and  6th  discounted  and  the  net 
proceeds  placed  to  your  credit. 

Your  bank  pass  book  should  show  a  separate  entry  for  each  of  these  acceptances. 
You  may  also  leave  for  collection  the  note  of  A.  W.  AIcKej-,  which  is  due  June  loth. 
This  note  should  be  entered  in  j-our  bank  pass  book,  but  the  amount  should  not  be 
extended  into  the  money  column.  The  following  is  the  form  of  entry  to  he  made  in  the 
bank  pass  book.  » 


June 


7    Note,  A.  W.  McKey,  $700, 


See  that  your  notes  are  properly  indorsed  and  make  out  a  separate  discount  slip  for 
each  of  the  acceptances.  Make  cash  book  entries  and  entries  in  your  bill  book  for  the 
two  acceptances,  but  no  entry  should  be  made  for  the  note  which  is  left  merely  for  collec- 
tion. You  will  be  notified  when  it  is  paid  and  the  amount  will  be  carried  into  the  monej- 
column  of  your  pass  book.  Do  not  forget  to  enter  the  net  proceeds  of  the  two  acceptances 
on  the  stub  of  your  check  book. 

Some  banks  give  a  receipt  for  notes  and  other  paper  left  for  collection,  instead  of  entering  short  in 
the  pass  book.     Others  enter  all  such  paper  in  the  back  part  of  the  pass  book. 

No.  .SI. — June  7.  REPORT.  Make  out  your  report  and  hand  it,  with  \'ouchers  for 
Others  and  Cash  Paid  Out,  to  your  teacher. 

Do  not  proceed  until  this  report  is  returned,  approved,  unless  5-our  teacher  so  directs. 

No.  S2. — June  8.  Pay  3'our  bill  of  June  ist,  favor  of  City  Mills  Co.,  deducting  a 
discount  of  3/. 

Calculate  the  discount  and  make  out  a  check  for  the  balance.  Fill  out  a  remittance 
blank,  and  place  the  check  and  the  remittance  blank  in  \^ouchers  for  Others.  Make  the 
proper  entries  in  the  cash  book. 

No.  s;j. — June  8.     This  invoice  has  been  received  for  goods  purchased  bj'-  ]Mr.  Adams. 

A'erify  the  invoice  and  paste  it  in  3'()ur  invoice  book. 

No.  S4. — June  10.  Pay  ^-our  invoice  of  June  2d  l)y  check,  less  discount,  and  make 
the  proper  entries  in  your  cash  book. 

No.  S5. — June  10.     This  order  has  been  received  l)y  mail. 

Make  a  bill  for  the  merchandise,  checking  each  item  as  entered  on  the  bill.  Draw  a 
draft,  as  requested,  and  leave  the  draft  at  your  bank  for  collection,  having  the  amount 
short-extended  in  your  bank  pass  book.  This  draft,  when  accepted,  will  become  a  bill 
receivable.  If  j-ou  should  send  the  draft  to  Mason  &  Co.  for  acceptance,  }ou  would  make 
no  entry  at  the  time,  but  would  await  its  return  from  them.  Instead  of  doing  this  >-ou 
have  placed  the  draft  in  the  bank  for  collection,  which  is  the  ordinary  method  of  handling- 
such  paper.  As  Mason  «Si  Co.  lia\e  agreed  to  accept  it,  yon  may  debit  /)///s  J\<rr/va/>/i' 
and  credit  them,     loiter  llie  draft  in  your  l)ill  book. 

No.  S(>. — June  i  i  .     This  order  has  l)een  handed  in  !)>■  .Mr.  Adams. 

Make  a  l:)ill,  and  do  not  forget  lo  c-lu-ek   dlT   llie   items.      ]?e  sure  >()ur  calculations  are 


MODERN    ILLUSTRATIVE    BOOKKEEPIXG.  119 

right,  after  deducting  3^^  discount.  Charge  Fletcher  Bros,  only  the  net  amount  of  the 
bill  entered  in  the  sales  book,  as  you  know  them  and  are  sure  they  will  pay  on  receipt 
of  goods. 

Xo.  ST. — JuxE  1 1 .  This  check  has  been  received  in  payment  of  merchandise  delivered 
on  the  same  date  to  Fletcher  Bros.  Credit  them  for  the  amount  of  the  bill,  as  shown  in 
yoirr  sales  book  under  same  date. 

Xo.  ,SS. — JuxE  II.  This  bill  is  for  freight  and  draj-age  on  all  goods  received  up  to 
date. 

You  may  pay  this  bill  in  cash.  Place  the  amount  in  3-our  Cash  Paid  Out  envelope, 
and  place  the  receipted  bill  in  5-our  A'oucher  File. 

Xo.  8JI. — JuxE  12.  On  May  5tli  H.  F.  Adams  borrowed  from  the  bank  $5000,  to 
pay  for  the  building  and  lot,  ^246  iSIain  St.,  giving  a  four  months'  note  for  the  amotmt. 
As  the  firm  now  has  several  thousand  dollars  in  the  bank,  for  which  there  is  no  immediate 
use,  it  will  be  well  to  pay  this  note,  as  discount  will  be  allowed  for  the  unexpired  time. 
The  note  has  85  days  to  run,  and  the  discount  on  $5000  for  85  daj^s  is  $7x.x3. 

Make  a  check  for  $49xx.x7,  take  it  to  the  bank  teller  and  receive  the  canceled  note. 
IMake  an  entry  in  the  cash  book  and  in  yotu  note  ledger.  If  no  bank  is  used  in  connec- 
tion with  these  transactions,  the  note  will  be  found  in  Bills  Paj'able  File.  Take  it  from 
the  file  and  place  the  check  in  Cash  Paid  Out,  instead  of  giving  it  to  the  bank  teller. 
Write,  Paid,  June  12,  190-,  across  the  face  of  the  note,  and  place  it  in  your  \"oucher  File. 

Xo.  DO. — JuxE  12.  This  order  has  been  received  through  ]\Ir.  Adams,  together  with  a 
check  for  ^500  to  apply  on  account.  Make  the  bill  and  enter  in  the  sales  book.  Credit 
F.  H.  Randall  cf  Co.  in  the  cash  book  for  the  amount  of  the  check. 

Xo.  01. — JuxE  13.  This  invoice  has  been  purchased  by  Mr.  Adams,  who  has  O.  K.'d 
it.     \'erify  the  calculations  and  paste  the  invoice  in  the  invoice  book. 

Xo.  1)2. — jUXE  13.  Take  from  your  Cash  Drawer  $100  in  currencj^,  and  also  the  checks 
of  Fletcher  Bros,  and  F.  H.  Randall  &  Co.  Deposit  these  in  the  bank,  and  ask  the  teller 
if  the  interest-bearing  note  of  A.  \V.  McKe\-,  dated  May  31st,  and  left  by  you  for  collec- 
tion, has  been  paid.  It  has  been  paid.  Therefore,  have  him  place  the  note  and  interest 
to  your  credit  in  the  bank  pass  book.  On  a  slip  of  paper  calculate  the  interest  on  this 
note  for  10  da5-s,  and  add  the  amount  of  the  interest  to  the  face  of  the  note.  This  is  the 
amount  which  should  be  placed  to  your  credit  in  the  bank  pass  book.  If  your  interest 
calculation  is  correct,  the  bank  clerk  will  give  you  credit  for  the  amount  of  the  note, 
which  is  its  face  plus  the  interest.  (If  no  bank  is  used,  enter  the  amount  3'ourself.) 
Add  this  amount  to  yom-  bank  balance  on  the  stub  of  your  check  book,  and  also  add  the 
amount  of  the  deposit  slip. 

You  have  received  $701.17  in  cash.  Of  this  amount  $700  is  for  bills  receivable,  the 
amount  of  A.  W.  ISIcKey's  note;  therefore,  Bz7/s  Receivable  should  be  credited  $700  in 
the  cash  book,  with  the  explanation,  A.  IV.  McKef  s  note  5  31.  The  remaining  $1.17 
has  been  received  for  interest,  and  therefore  Interest  should  be  credited  in  the  cash  book 
$1.17,  with  the  explanation,  on  above  note. 

Kiile  28.' — I.XTEREST  is  credited  ivhcn  it  is  allowed  to  the  business  by  other  persons. 


120  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

X<>.  !);>. — June  13.  Your  acceptance  of  June  3d  is  due  to-day,  and  as  it  was  made 
payable  at  the  bank,  it  should  be  charged  to  yotur  account. 

Take  this  acceptance  from  the  Bills  Payable  File,  and  present  it  to  the  bank  teller, 
requesting  him  to  charge  it  to  your  account.  He  will  keep  the  draft  and  return  it  to  you 
canceled  when  your  bank  book  is  written  up.  If  3'ou  have  no  bank,  write  Paid,  June  ij, 
across  the  face  of  the  draft,  and  enter  it  on  the  credit  side  of  3'our  bank  pass  book,  placing 
the  canceled  draft  in  your  Voucher  File. 

Make  an  entrj^  in  5'our  cash  book,  to  show  that  the  acceptance  has  been  paid.  What 
account  should  be  debited?  Whj'?  In  your  check  book  on  the  stub  deduct  this  amount, 
$1111.62,  from  the  amount  on  deposit,  as  shown  by  the  balance  of  the  stub.  Why  should 
this  be  done  ? 

No.  i)4. — June  14.  This  order  has  been  sent  in  by  Mr.  Adams,  who  is  on  an  out  of 
town  trip.  Desiring  to  take  advantage  of  the  discount.  Rice  &  Pond  have  given  him 
their  note  at  four  months,  with  interest,  for  $1000,  to  pay  the  balance  of  their  old  account 
and  to  apply  on  this  order.  They  agree  to  accept  a  sight  draft  for  the  balance  of  the 
order,  whatever  it  may  be,  or  will  send  check  on  receipt  of  bill. 

Fill  the  order  and  enter  in  your  sales  book,  allowing  them  3  r  discount.  .  Prepare 
freight  receipts  to  accompany  this  invoice.  Place  the  note  in  3'our  Cash  Drawer  and 
make  the  proper  entries  in  the  journal  and  in  the  bill  book.  Do  not  draw  at  sight  for  the 
balance,  but  allow  it  to  remain  on  account. 

No.  9.5. — June  14.  This  order  is  from  a  new  customer  and  is  sent  in  by  Mr.  Adams, 
who  vouches  for  the  financial  standing  of  the  firm.  They  ask  regular  ten-da}'  cash 
discount,  and  agree  to  accept  a  sight  draft  in  ten  days. 

Make  the  invoice  and  freight  receipts  and  draw  a  sight  draft,  dating  it  ten  days  ahead, 
or  June  24th.  Write  a  letter  to  accompany  the  bill,  informing  Varick  &  Co.  that  j^ou 
will  draw  on  them,  as  requested,  in  ten  days.  Enclose  invoice,  letter  and  freight  receipt 
in  an  envelope  properly  addressed.  Place  the  draft  in  your  Cash  Drawer,  and  two  or 
three  days  before  it  becomes  due  place  it  in  the  bank  for  collection.  You  will  be  informed 
when  to  do  this. 

Many  bookkeepers  would  not  draw  the  sight  draft  at  this  time,  but  would  wait  until  it  became  due. 
If  a  draft  is  not  drawn  at  the  same  time  a  sale  is  made,  it  is  ajjt  to  be  overlooked. 

No.  t)<>. — June  14.  Pay  j-our  invoice  of  June  5th,  Cit}'  Mills  Co.,  $1266,  less  y<> 
discount.  Calculate  the  discount,  which  will  be  $3x.x8.  Write  a  check  for  the  amount 
due.  Enclose  the  check  with  a  remittance  blank  filled  out  in  a  properly  addressed 
envelope,  and  place  in  Vouchers  for  Others.     Make  the  proper  entries  for  the  transaction. 

No.  97. — June  15.  This  purchase  has  been  made  Ijy  Mr.  Adams,  who,  wishing  to 
take  advantage  of  the  best  discount,  agrees  to  pay  spot  cash  or  to  give  a  note  with  interest. 
Not  wishing  to  pay  cash  at  this  time,  you  may  give  a  note  at  15  days,  with  intere^^t,  for 
the  amount  of  the  invoice.  Paste  the  invoice  in  the  invoice  book  and  make  entr>-  in  the 
note  ledger.     Place  the  note  in  Bills  Payable  File. 

No.  9S.— June  15.  SHIPMENTS.  This  letter  calls  for  a  shiinucnt  of  merchandise 
to  another  person,  to  be  sold  on  commission,  and  such  transactions  are  r.oL  al  all  uncom- 
mon in  l)usiness.  When,  for  any  reason,  goods  are  not  selling  \\cll  in  any  i^arlicnlar 
locality,  it  is  often  good  j^olicy  to  send  them  to  a  connnission  merchant  in  some  place 
where  there  is  likely  to  l)e  a  better  demand  for  tliem.  The  connnission  dealer  sells  the 
goods,  and  after  taking  a  certain  i)er  cent  for  connni.ssion,  sends  the  balance  to  the  person 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


121 


who  shipped  the  goods.  A  quantity  of  goods  shipped  to  be  sold  on  commission  is  desig- 
nated as  a  "shipment."  The  shipment  is  entered  in  the  sales  book  under  the  title 
"  Shipment  to  (the  name  of  the  commission  dealer)."  The  shipment  is  charged  for  the 
regular  cost  price  of  the  merchandise,  and  if  any  charges  have  been  paid  the  shipment  is  also 
debited  for  these  in  the  cash  book. 

An  account  is  opened  in  the  ledger  with  each  shipment.     If  4; wo  or  more  shipments 

are  sent  to  the  same  person  or  firm,  an  account  is  opened  with  Shipment  to 

iii,  Shipment  to "^2,  and  so  on,  opening  a  separate  account  for  each  ship- 
ment sent. 

You  maj^  send  T.  W.  Bowen  &  Co.,  Dover,  a  trial  shipment  of  50  brls.  Northern  Star 
and  25  brls.  Searchlight.  Fill  out  a  shipment  blank  found  in  your  business  forms,  alsd  a 
freight  receipt,  which  3-ou  will  enclose  in  an  envelope  addressed  to  T.  W^.  Bowen  &  Co. 
The  following  is  a  form  showing  the  proper  method  of  entering  a  shipment  in  the  sales 
book. 


2  £>-i^^.  o^-^!:^.  0{f>-r>t7-^z^  -^^^^^et-^ 


"■T^^Ci:-4>2Z-^-^^i?fT:^>, 


/  ac  o^ 


2  Z^ 


/  /  J'O 


Rule  24. — Shipments  are  debited  for  the  cost  price  of  the  merchayidise  shipped,  and 
for  all  advance  charges  paid  upon  it. 

Find  the  cost  price  from  your  invoice  book. 

Xo.  1)9. — June  15.  You  may  pay  your  clerks  as  follows:  R.  E.  Leavitt,  $30;  D.  J. 
Allard,  $20.  As  you  have  not  enough  money  in  3'our  Cash  Drawer,  you  may  make  out  a 
cash  check  for  the  amount  required,  $50.     Receive  the  cash  and  place  it  in  Cash  Paid  Out. 

If  there  is  no  bank,  present  the  check  to  your  teacher,  who  will  give  you  the  money. 
Make  the  proper  entry  for  the  above  transaction. 

When  cash  is  drawn  from  a  bank  for  use  in  business,  what  is  known  as  a  cash  check 
should  be  used.  Such  a  check  requires  no  indorsement.  The  following  is  a  form  of 
cash  check. 


(Your  place  here.) 


''^^1  "order  of  -^C^^^^  


}/^    f/^ 


^(^^^y^<2^f^^J^^ 


122  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

Xo.  lOO. — June  15.  REPORT.  Make  out  j-our  report  and  hand  it,  with  Vouchers 
for  Others  and  Cash  Paid  Out,  to  your  teacher.  Do  not  proceed  until  the  report  is 
returned,  aj^proved,  unless  3'our  teacher  so  dii'ects. 

No.  101. — June  17.  This  is  a  mail  order  and  calls  for  a  small  lot  of  tea,  to  be 
followed  with  a  larger  ^lot  of  goods,  to  be  sent  as  soon  as  you  are  satisfied  as  to  the 
reliability  of  the  firm,  with  whom  j'ou  have  had  no  dealings  thus  far. 

Make  out  a  C.  O.  D.  and  enter  the, sale  in  3'our  sales  book,  as  in  No.  40,  page  88. 
This  is  a  cash  sale,  and  as  such  it  is  entitled  to  yi  discount.  Deduct  the  discount  when 
)^ou  enter  in  the  sales  book,  also  upon  the  bill,  which  should  be  for  the  net  amount  only. 

*  Xo.  102. — ^JuNE  17.  You  have  received  but  few  orders  for  Ceylon  tea  recenth', 
so  you  have  decided,  with  Mr.  Adams,  to  make  a  shipment  of  20  cases  of  this  tea, 
closing  out  your  stock.  Send  it,  wdth  10  mats  Java  coffee,  to  T.  W.  Bowen  &  Co.,  of 
Dover,  to  be  sold  on  commission.     Pa}'  freight  in  advance,  $3.60,  in  currency. 

Enter  the  shipment  in  j^our  sales  book  (T.  W.  Bowen  &  Co.  ^2),  and  make  the  proper 
entry  in  j^our  cash  book  for  the  $3.60  paid  as  freight.  What  accotint  should  l^e  debited 
for  this  amount?     Why?     (See  No.  98.) 

Xo.  103. — June  17.  This  purchase  of  merchandise  has  been  made  by  ]Mr.  Adams. 
Paste  the  invoice  in  your  invoice  book  after  verifying  the  calculations. 

No.  10-4. — June  18.  Write  a  check  for  the  amount  due  Shields  Bros.,  and  send  it 
with  a  remittance  blank  properly  filled  out.     Make  the  proper  entr\-. 

Xo.  105. — June  iS.  This  draft  has  been  drawn  on  j'oti  by  L.  Hennes  &  Co.,  and  is 
the  amount  due  for  bill  of  May  24th.  You  will  accept  the  draft,  and  place  it  in  3'our 
Bills  Paj-able  File.  What  account  should  be  debited?  Why?  (See  transaction,  No.  78, 
page  117.) 

Xo.  10(>. — June  19.  The  references  given  bj^  D.  W^.  Perr}-  &  Co.  having  proved 
satisf actor}-,  you  may  fill  their  order  of  June  15th.  Do  not  forget  to  check  each  item 
and  make  the  entry  required. 

Xo.  107. — June  19.  This  is  a  return  of  C.  O.  D.  sent  June  i6th.  Make  the  proper 
entry  (see  No.  47,  page  89).     Pay  50/'  in  currency  for  express  charges. 

Xo.  108. — June  19.  Take  from  your  Cash  Drawer  the  note  of  Rice  &  Pond  received 
June  14th,  and  have  it  discounted  and  the  net  proceeds  placed  to  yotir  credit. 

This  is  a  fourth  months'  interest-bearing  note,  therefore,  on  a  discount  memorandum, 
write  the  amount  of  interest  which  will  be  due  Oct.  12th,  on  which  date  the  above  note 
is  payable,  and  add  the  interest  to  the  face  of  the  note.  The  interest  on  $1000  for  four 
months  is  $20.  From  Jtme  19th  to  Oct.  12th,  the  due  date  of  the  note,  is  115  days. 
Calculate  the  discotint  on  $1020,  the  amount  due  Oct.  12th,  for  115  daj-s.  This  amount  is 
$19.55,  which  subtract  from  $1020,  and  you  will  have  the  amount  to  be  placed  to  your 
credit  in  your  bank  pass  book  and  on  the  sttib  of  your  check  book. 

In  the  cash  book  you  have  received  cash  for  the  note,  $1000,  and  also  for  tlie  interest, 
$20;  therefore,  you  will  have  two  entries  on  the  debit  side  of  your  cash  book.  \\'hal 
accotuit  should  ])q  credited  for  the  ^1000?  Win?  What  aecounl  should  be  credited  for 
the  $20  interest  ? 

On  the  credit  side  of  your  cash  book  you  should  j^lace  the  amount  of  discount  you 
have  allowed  the  bank,  which  is  f>iq.^^  (sec  ex:un])le  May  (),  page  99). 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  123 

Xo.  10J>. — June  19.  In  this  transaction  Randall  &  Co.  have  ordered,  goods  and  sent 
you  a  check  sufficient  to  pa}^  the  balance  of  their  bill  of  June  12th,  and  part  of  the 
merchandise  ordered  in  their  letter  accompanying  the  check.  They  are  entitled  to  3;^ 
discount  on  such  goods  as  this  check  will  pay  for.  At  y'c  discount,  97'/  will  pay  for  $1.00 
worth  of  goods  as  invoiced  at  their  regular  price,  therefore  it  is  evident  that  $600  will  pay 
for  as  many  dollars'  worth  as  97;''  is  contained  in  $600.  $6oo-^-.97=$6i8.56,  and  F.  H. 
Randall  &  Co.  should  be  credited  with  this  amount.  Enter  %6i8.36  on  the  debit  side  of 
your  cash  book,  and  on  the  credit  side  enter  %i8.s6,  the  amount  of  merchandise  discount 
allowed  F.  H.  Randall  &  Co.    Enter  the  sale  as  usual  in  the  sales  book.     Do  not  deduct  3'^. 

Xo.  110. — June  20.  This  account  sales  has  been  received,  together  with  a  check 
for  the  net  proceeds.  It  is  the  amount  you  have  received  for  the  shipment  made  June 
15th,  and  shows  you  how  much  Bowen  &  Co.  received  for  the  goods,  also  the  amount  tliej' 
paid  for  freight  and  their  commission.  Wliat  account  should  be  debited?  WTiat  account 
has  produced  value  to  the  business  in  this  case? 

Rule  2-5. — Shipments  are  credited  with  the  net  proceeds  show7i  on  the  account  sales 
received  from  the  person  to  whojn  the  shipvient  zvas  sent. 

Place  the  check  in  your  Cash  Drawer,  and  the  account  sales  in  your  Voucher  File. 

Xo.  111. — June  20.  Take  from  your  Cash  Drawer  $50  in  bills;  also  the  checks  of 
F.  H.  Randall  &  Co.  and  T.  W.  Bowen  &  Co.  Enter  the  amounts  on  a  deposit  ticket, 
and  take  it  with  the  checks  and  j'our  bank  pass  book  to  the  bank.  Make  the  proper 
entry  on  your  check  book  stub. 

Xo.   112. — June  20.     Purchase  of  merchandise  on  account  by  Mr.  Adams. 

Xo.  113. — June  20.  Pay  Reynolds,  Davis  &  Co's.  invoice  of  June  loth,  less  2:*,  by 
check. 

Xo.  11-1. — June  21.  This  bill  is  for  freight  and  cartage  to  date.  Write  a  check  for 
the  amount,  and  place  it  in  Cash  Paid  Out.  Place  the  receipted  bill  in  your  Voucher 
File.     What  account  should  be  debited  for  this  amount  in  your  cash  book? 

Xo.  115. — June  21.  Mr.  Adams  has  purchased  this  invoice  and  has  agreed  to  accept 
a  draft  at  30  days  for  $800,  the  balance  to  be  paid  in  four  months.  Accept  the  draft 
which  accompanies  the  invoice,  and  place  it  in  Bills  Payable  File.  Make  the  proper  entries 
in  your  books  for  the  transaction. 

Xo.  11(>. — June  21.     This  purchase  is  on  account.     Enter  as  usual. 

'  X^'o.  117. — June  22.  Mr.  West,  of  West,  Stone  &  Co.,  has  called  upon  you,  soliciting 
orders,  and  being  short  of  money  has  agreed  to  allow  you  2,'^  discount  on  the  invoice  of 
May  20th,  which  is  not  due  until  July  19th,  if  you  will  accept  a  ten-day  draft.  You  agree 
to  this  proposition,  and  accept  a  draft  for  the  amount,  less  2^;.  Place  the  draft  in  Bills 
Payable  File.     What  account  should  be  credited  for  the  2<^  discount? 

Xo.  118. — ^JuNE  22.  Smith,  Perkins  &  Co.  have  decided  to  retire  from  business,  and 
have  made  Mr.  Adams  an  offer  of  12  J^'f'  discount  from  regular  market  quotations  for  such 
goods  as  he  can  use  from  stock.  This  invoice  has  been  selected  on  the  terms  indicated. 
Write  the  check  and  note,  and  enter  in  cash  book,  journal  and  bill  book.  Place  the  check 
in  Cash  Paid  Out  and  the  note  in  Bills  Payable  File. 


124  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

No.  119. — June  24.     Take  the  sight  draft  on  Thos.  Varick  &  Co.  from  j-our  Cash 

Drawer  and  enter  it  on  a  deposit  ticket.     Take  this  ticket,  with  your  bank  pa.ss  book,  to 

the  bank,  and  ask  the  teller  to  enter  it  to  your  credit.     You  drew  this  draft  at  the  time  of 

sale,  but  made  no  entry.     Wliat  account  should  be  debited,  now  that  you  have  received 

credit  for  the  draft  at  your  bank  ?     WTiat  account  should  be  credited  ? 

It  is  the  custom  of  most  banks  to  place  sight  drafts  to  the  credit  of  responsible  depositors,  when 
requested,  the  same  as  checks.     If  not  paid,  they  are  charged  back  to  the  depositor. 

No.  120. — June  24.  REPORT.  Make  out  your  report  and  hand  it,  with  Vouchers 
for  Others  and  Cash  Paid  Out,  to  your  teacher.  Do  not  proceed  until  the  report  is 
returned,  approved,  unless  so  directed  b}'  3^our  teacher. 

No.  121. — June  24.  This  account  sales  has  been  received  from  T.  W.  Bowen  &  Co., 
who  have  placed  the  net  proceeds  to  your  credit  subject  to  your  sight  draft.  What  account 
should  be  debited  for  this  amount  ?  Why  ?  What  account  should  be  credited  ?  Make 
the  proper  entry  in  your  journal,  and  place  the  account  sales  in  your  Voucher  File. 

No.  122. — ^JuNE  24.  Fletcher  Bros.,  of  yoiu"  city,  have  been  getting  y'r  discount  for 
cash,  but  being  short  of  money  at  this  time,  they  ask  you  to  take  their  acceptance  at  30 
days,  with  interest  at  6^  added,  for  the  amount  of  the  bill,  and  still  allow  them  the  full 
amount  of  the  discount.  Adding  6i  interest  to  the  net  amount  of  the  bill  will  give  3'ou, 
in  30  days,  the  same  amount  as  if  they  had  paid  you  cash  and  you  had  placed  it  on  interest 
for  that  time,  so  you  will  accept  the  proposition  and  fill  the  order. 

Draw  a  draft  at  30  days  on  Fletcher  Bros,  for  the  net  amount  of  the  bill,  as  shown  by 
the  sales  book,  with  30  days'  interest  at  6i  added.  Take  the  draft  to  your  teacher,  who 
wall  accept  it  for  Fletcher  Bros,  if  the  amount  is  correct.  Enter  in  your  sales  book, 
journal  and  bill  book. 

No.  12;>. — June  24.  The  draft  on  E.  Mason  &  Co.,  at  10  days,  left  for  collection 
June  loth,  has  been  paid.  Have  the  bank  teller  enter  the  amount  in  your  bank  pass  book. 
(If  you  have  no  bank,  enter  it  yourself.)  Make  the  proper  entry  in  your  cash  book,  and 
do  not  fail  to  add  the  amount  to  the  balance  shown  on  the  stub  of  your  check  book. 

No.  124. — June  24.  Draw  a  draft  at  sight  on  T.  W.  Bowen  &  Co.  for  the  net  pro- 
ceeds of  shipment  No.  2,  as  shown  by  account  sales  of  Jitne  22d.  Enter  the  amount  of 
this  draft  on  a  deposit  slip  and  take  it  to  the  bank  with  your  bank  pass  book.  Have  the 
teller  give  you  credit  for  the  amount  of  the  draft  (.see  No.  123).  Enter  on  tlie  stub  of 
your  check  book.     Make  the  proper  cash  book  entry. 

No.  125. — June  24.  This  order  is  sent  in  l:)y  Mr.  Adams,  and  Varick  &  Co.  agree  to 
accept  a  draft  at  four  months  on  receipt  of  goods.  (No  discount  on  this  order.)  Make 
freight  receipt. 

No.  12<>. — June  24.  This  order  is  sent  in  by  Mr.  Adams,  antl  contains  a  check  for 
$500,  to  apply  on  invoice  of  the  19th,  less  y'f,  for  such  part  of  the  bill  as  this  check  will 
pay  (see  transaction  No.  109,  page  123). 

No.  127.— June  25.  This  acceptance  was  drawn  by  A.  W.  McKey  on  C.  H.  Brooks 
&  Co.  on  June  15th,  and  was  accepted  by  C.  H.  Brooks  tS::  Co.  McKe>-  hands  Ihc  accep- 
tance over  to  you;  it  is  not  due  for  50  days,  therefore  it  is  not  wortli  its  face,  $500,  but 
the  discount  on  $500  for  .50  days  should  be  deducted  from  the  face  of  the  paper  in  order 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  125 

to  find  out  what  it  is  really  worth  to  you  on  June  25th.  The  discount  on  $500  from  June 
25th  to  the  date  at  which  the  draft  becomes  due,  August  14th,  50  days,  equals  $4.17. 
Deducting  $4.17  from  $500  leaves  $495.83,  the  net  value  of  the  draft  June  25th.  Credit 
A.  VV.  McKey  for  this  amount.  What  account  should  be  debited  for  the  face  of  the 
draft?  Why?  What  account  should  be  credited  for  $4.17?  Why?  Make  proper  entry 
in  biH  book. 

Enter  in  your  journal. 

Rule  26. — Discount  is  credited  when  it  is  allowed  to  the  business  by  other  persons. 

No.  128. — June  25.  Ship  T.  W.  Bowen  &  Co.  loobrls.  N.  S.  flour,  loobrls.  Search- 
light, 20  hf.  chests  English  Breakfast,  24  hf.  chests  Oolong,  100  doz.  C.  corn,  100  doz. 
C.  tomatoes,  and  pay  freight  in  advance  by  check,  $27.  Make  sales  book  and  cash  book 
entries. 

No.  129. — ^JuNE  25.  Draw  at  four  months  from  date,  on  Varick  &  Co.,  in  favor  of 
E.  Westen  Tea  &  Spice  Co.,  for  the  amount  of  the  bill  of  the  24th,  ^^5 10.04.  Send  it  to 
E.  Westen  Tea  &  Spice  Co.,  to  apply  on  account,  less  the  discount  for  four  months. 

The  draft  is  not  worth  $510.04  until  it  becomes  due,  four  months  after  date,  or  Oct. 
25th.  Calculate  the  discount  for  four  months,  which  will  be  $10.20.  The  net  value  of  the 
note  at  this  time,  therefore,  is  $499.84.  For  what  amount  should  E.  Westen  Tea  & 
Spice  Co.  be  debited?  For  what  amount  should  Varick  &  Co.  be  credited?  What  account 
should  be  debited  for  $10.20?  Why?  Place  the  draft  in  Vouchers  for  Others,  and  enter 
in  your  journal. 

No.  130. — June  26.  On  the  evening  of  June  25th  a  fire  resulted  in  the  partial  destruc- 
■  tion  of  the  building,  1:246  Main  St.,  and  the  total  loss  of  office  furniture.  The  books  were 
saved;  also  the  cash  and  the  contents  of  safe.  Most  of  the  goods  were  destroyed.  From 
your  books  you  find  that  you  had  on  hand  the  list  of  goods  No.  130.  This  schedule  of 
goods  has  been  carefully  made  up  from  your  sales  book  and  invoice  book,  and  is  believed 
to  be  a  correct  statement  of  merchandise  on  hand  at  the  time  of  the  fire. 

Fill  out  the  amounts.  Sign  your  own  name  after  that  of  Mr.  Adams.  Then  hand 
the  schedule  to  your  teacher,  who  represents  the  insurance  company,  and  tell  him  that 
you  present  this  as  your  claim  for  loss  by  the  fire. 

No.  131. — June  26.  This  offer  requires  the  consent  of  the  Equitable  Insurance  Com- 
pany before  it  can  be  accepted,  as  no  adjustment  of  the  loss  has  been  made.  Ask  your 
teacher,  who  represents  the  insurance  company,  for  permission  to  accept  this  offer.  He 
will  write  Permission  is  hereby  granted  to  accept  this  offer,  across  the  face  of  the  letter  from 
Fletcher  Bros.,  and  you  may  make  out  a  bill  of  sale  for  the  entire  lot  without  itemizing. 
Place  the  check  (No.  131)  in  your  Cash  Drawer,  and  make  the  proper  entries. 

No.  132. — June  27.  Pay  invoice  of  June  14th  favor  of  Geo.  C.  Buell  &  Co.,  less 
discount,  by  check. 

No.  133.— June  28.  Your  acceptance  of  June  18th,  favor  of  L.  Hennes  &  Co.,  is  due 
to-day. 

Take  this  acceptance  from  Bills  Payable  File,  and  proceed  exactly  as  in  No.  93.  Enter 
in  your  cash  book,  bill  book,  and  check  book.  Deduct  the  amount  from  your  bank  balance 
on  the  stub  of  your  check  book. 


126 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


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No.  134. — June  30.  This  draft  is  in  full  pajrment  of  claims  against  the  Equitable 
Insurance  Company,  which  pays  you  $5000  on  the  building-  and  $3000  on  the  stock  of 
merchandise.  What  account  should  be  credited  for  $5000?  What  account  for  $3000? 
Make  the  proper  entries. 

No.  135. — June  30.  Deposit  all  checks  and  cash.  Pay  your  note  of  June  15th  and 
interest  by  check.  Face  of  note,  $816.55;  interest,  15  days,  $2.xx.  The  check  is  $818. xx. 
Proceed  as  in  example  May  14,  page  99. 

Itiih'  27. — IsTEREST  is  debited  tvhen  it  is  a/towed  by  the  business  to  ot/ier  persons. 

No.  13G. — June  30.  In  the  journal  credit  yourself  $100  and  H.  F.  Adams  ^125  for 
the  amount  due  for  salaries  for  the  month  of  June.  What  acc(nuit  should  be  del)ited 
for  $225? 

No.  l.*J7. — June  30.  Draw  a  cash  check  for  $50,  and  ]iay  H.  V.  TAa\  in  ^3o  and  D. 
J.  Allard  $20,  salaries  due  to  date. 

No.  138. — June  30.  H.  F.  Adams  hands  in  this  bill  (No.  13S)  of  $87.50  for  travel- 
ing expenses  incurred  while  on   the  road  during   '.he  month  ol"  June,  which  \\v  has  jxiid 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


127 


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from  his  own  funds.     What  account  should  be  debited  for  this  amount?     What  account 
should  be  credited  ? 

No.  139. — June  30.     Pay  freight  and  cartage  bill  to  date  by  check. 

No.  140. — June  30.  Make  a  report  and  hand  it,  with  Vouchers  for  Others  and  Cash 
Paid  Out,  to  your  teacher. 

Have  your  bank  book  written  up. 

Post  your  transactions  from  journal,  cash  book,  invoice  book  and  sales  book.  Check 
back  your  postings  according  to  instructions  on  page  26.  Make  out  your  monthlj-  state- 
ment to  each  customer  and  take  a  trial  balance.  Do  not  close  the  cash  book,  but  find 
the  balance  in  pencil  and  carry  it  to  the  trial  balance. 

directions  for  making  a  statement  of  losses  and  gains. 

June  30,   190-. 

Using  the  above  form  as  a  model,  prepare  in  your  trial  balance  book  a  statemetit  of  the 
gains  and  losses  of  the  month  just  closed.  The  names  of  the  accounts  used  in  the  model 
are  those  of  your  June  accounts,  but  the  amounts  are  entirely  diflferent,  and  are  used  only 
to  show  you  the  exact  form  of  a  complete  statement. 


128 


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The  merchandise  on  hand  at  the  beginning  of  the  month  of  June,  and  the  amount  of 
the  purchases  during  the  month,  will  be  found  on  the  debit  side  of  the  Merchandise 
account  in  the  ledger.  The  sales  of  merchandise  during  the  month  of  June  will  be  found 
on  the  credit  side  of  the  Merchandise  account  in  the  ledger.  This  amount  includes 
the  amount  received  for  insurance.  Find  the  loss,  and  close  the  first  section  of  your  state- 
ment of  gains  and  losses,  bringing  down  the  loss  in  the  second  section.  Find  the  cost  of 
shipment  to  T.  W.  Bowen  &  Co.,  No.  2,  from  the  debit  side  of  that  account  in  the 
ledger;  find  the  net  proceeds  from  the  credit  side.  Find  the  value  of  real  estate  at 
the  end  of  May  from  the  statement  of  resources  and  liabilities,  Ma}- 31st.  The  lot  on 
which  your  building  formerly  stood  is  estimated  to  l)e  worth  $6doo.  The  amount 
received  for  insurance  is  shown  on  the  credit  side  of  Real  Estate  account  in  your  ledger. 
The  amounts  of  expense  and  ofhce  fixtures  will  be  found  on  the  debit  side  of  those  accounts 
in  the  ledger.  Net  proceeds  of  shipment  to  T.  W.  Bowen  &  Co.,  No.  i,  will  be  found  on 
the  credit  side  of  that  account  in  the  ledger;  the  cost  on  the  debit  side.  The  excess  of 
merchandise  discount  will  l)e  found  by  taking  the  balance  of  that  account,  as  shown 
in  your  trial  balance,  and  the  same  is  true  of  interest  and  discount.  Write  the  net  loss 
in  red  ink,  and  Cxose  the  statement  of  gains  and  losses. 

DIRECTIONS  FOR   MAKING  A  STATEMENT  OF   RESOURCES  AND  LIABILITIES,  OR  BALANCE   SHEET. 

JliNIC   30,    1 90-. 

Usijig  the  alcove  form  as  a  model,  ])repare  in  your  trial  balance  book  a  statement  of 
resources  and  lial)ilities  for  the  month  of  June.     The  nanus  used  in  the  model  are  those 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


129 


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of  your  accounts  for  the  month  of  June,  but  the  amounts  are  entirely  different,  and  are 
used  merely  to  give  you  a  complete  form. 

Cash  i)i  bank  will  be  the  amount  of  cash  shown  in  your  trial  balance;  also  on  the  stub 
of  3'our  check  book.  Real  Estate  will  be  shown  by  3'our  inventory  at  the  end  of  June,  $6ooo. 
Bills  Receivable  will  be  the  balance  of  that  account,  as  shown  in  your  trial  balance.  Open 
book  accounts  considered  good  will  comprise  the  accounts  of  A.  A.  Knowles  &  Co.,  Dick- 
son &  Young,  A.  W.  McKey,  F.  C.  Tenney,  F.  H.  Randall  &  Co.,  Rice  &  Pond,  Edwin 
Mason  &  Co.,  D.  W.  Perry  &  Co.,  and  shipment  T,  W.  Bowen  &  Co.,  No.  3,  as  shown 
in  your  trial  balance.  Bills  Payable  will  be  the  balance  of  that  account,  as  shown  in 
your  trial  balance.  Open  book  accounts  will  be  the  balances  due  West,  Stone  &  Co., 
E.  Westen  Tea  &  Spice  Co.,  Shields  Bros.,  and  Smith,  Perkins  &  Co. 

Close  all  accounts  in  your  ledger  showing  losses  or  gains;  also  the  Ivoss  &  Gain  account, 
and  the  partners'  accounts. 

Xo.  l-il. — JuNi;  30.  It  has  been  decided  to  discontinue  the  business.  You  take  for 
your  net  worth  the  amount  of  the  shipment  to  T.  W.  Bowen  &  Co.,  No.  3,  at  its  ledger 
valuation,  $1955,  and  receive  a  check  for  the  balance.  Make  out  the  check,  and  enter  in 
the  cash  book.  ^lake  a  journal  entry  to  show  the  transfer  of  the  shipment.  Post  these  two 
entries  and  balance  the  cash  book.  H.  F.  Adams  retains  the  remaining  resources  of  the 
business,  you  agreeing  to  make  up  one-half  of  anj^  losses  vrhich  may  occur  from  bad  debts, 
and  he  agreeing  to  pay  all  the  liabilities  of  the  business.  The  real  estate  is  valued  at  $6000. 
Draw  a  check  to  the  order  of  H.  F.  Adams  for  the  balance  of  cash  remaining  in  bank. 
Indorse  this  check  in  H.  F.  Adams's  name  to  the  order  of  your  teacher  and  give  it  to 
him.  (No  entry.) 
Com. — 9 


130  MODERN    ILLUSTRATIVE   BOOKKEEriNG. 

Prepare  a  memorandum  of  this  agreement,  and  sign  it  and  ask  your  teacher  to  sign, 
for  H.  F.  Adams.      Get  your  check  cashed  and  hand  the  amount  to  your  teacher. 

Prepare  a  notice  of  dissolution  of  partnership,  according  to  model  (see  Appendix), 
and  inclose  a  copy  with  )'our  monthl}-  statement  to  each  customer. 

Write  a  letter  to  T.  W.  Bowen  &  Co.,  Dover,  notifying  them  of  the  dissolution,  and 
requesting  them  to  send  the  net  proceeds  of  shipment  No.  3  to  you  when  they  render 
an  account  of  sales. 

EXAMINATION. 

The  United  States  Civil  Service  Commission  in  its  examinations  in  bookkeeping 
requires  the  candidate  to  take  common  foolscap  paper  and  make  all  rulings  required  by 
the  transactions.  Unless  otherwise  directed,  you  may  take  common  foolscap  paper  and 
rule  properly  for  the  journal,  sales  book,  cash  book  and  ledger,  on  which  to  cop}'  the 
records  required  in  the  following  series  of  transactions,  which  are  designed  to  test  your 
understanding  of  the  principles  taken  up  in  the  past  three  months'  voucher  work.  No 
references  are  given,  as  no  new  principles  are  introduced. 

Your  teacher  will  assign  you  a  selling  price  list  from  the  Cost  and  Selling  Price  Lists, 
page  132. 

Use  great  care  in  making  your  enterics,  that  no  mistakes  wall  appear  in  your  w'ork. 
After  your  journal,  cash  book  and  sales  book  have  been  written  up,  go  over  the  transac- 
tions carefully  to  see  that  no  mistakes  have  been  made.  Then  post  to  j^our  ledger  and 
take  a  trial  balance.  Using  the  models  on  pages  92,  93,  96  and  97,  prepare  statements 
of  losses  and  gains  and  resources  and  liabilities,  and  close  your  ledger,  after  whicli  present 
the  examination  papers  to  your  teacher. 

TRANSACTIONS. 

June  I. — Commenced  the  Wholesale  Carpet  business,  at  '182  Elm  Street,  investing 
cash,  $5500. 

June  I. — Paid  $250  for  office  furniture. 

June  2. — Bought  of  John  H.  Pray  &  Co.,  Boston,  net  30,  2^  10,  600  yds.  Moquette, 
750  yds.  Body  Brussels,  1200  yds.  Ingrain,  1200  yds.  Matting,  2500  yds.  Lining. 

June  3. — Bought  of  Barton  &  Bros.,  Philadelphia,  onyournote  at  15  days,  with  interest, 
1220  yds.  Linoleum,  1429  3^ds.  Oilcloth. 

June  4. — Sold  E.  B.  Ailing  &  Co.,  3';  cash,  125  yds.  Moquette,  150  yds.  Body 
Brussels,  300  yds.  Lining. 

June  4. — Sold  F.  H.  Walling  &  Co.,  net  30,  2  10,  200  yds.  Ingrain,  400  yds.  Matting, 
600  yds.  Lining. 

June  4. — Sold  J.  G.  Carter  &  Co.,  on  their  note  ai  4  mos.,  400  yds.  Moquette.  450 
yds.  Body  Brussels,  850  yds.  Lining. 

June  5. — Sold  E.  H.  Smith  &  Co.  on  their  acceptance  at  30  days,  75  3'ds.  Moquette, 
150  yds.  Body  Brussels,  600  yds.  Linoleum,  429  yds.  Oilcloth. 

June  5. — Discounted  J.  G.  Carter's  note  of  the  4th  inst.  at  the  Cil>-  Bank,  ami  had 
net  proceeds  placed  to  your  credit. 

June  5. — Bought  of  John  H.  Pray  &  Co.,  Boston,  net  30,  2  10,  950  yds,  Moquette, 
892  yds.  Body  Brussels,  2200  yds.  Lining, 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  131 

June  6. — Paid  freight  and  drayage,  $32.10;  rent  for  month  of  June,  $75;  books  and 
stationery,  $22.50. 

June  6. — Bought  of  James  Smith  &  Co.,  New  York,  subject  to  draft  at  10  days, 
400  yds.  Axminster,  525  yds.  Velvet,  984  yds.  Tapestry  Brussels,  2000  yds.  Lining. 

June  7. — Sold  Reed  &  Savage,  subject  to  sight  draft,  less  3"/,  145  yds.  Axminster, 
220  yds.  Velvet,  484  yds.  Tapestry  Brussels.     Deduct  3'c. 

June  8. — Sold  Knowles  Sz.  Johnson,  on  account,  net  30,  2  '10,  300  yds.  Moquette,  392 
yds.  Body  Brussels,  400  yds.  Ingrain,  1200  yds.  Lining. 

June  8. — Drew  a  sight  draft  on  Reed  &  Savage  for  the  amount  of  invoice  sold  them 
7th  inst.,  less  3"^,  and  had  the  draft  placed  to  your  credit  in  the  City  Bank. 

June  9. — Paid  the  invoice  in  favor  of  J.  H.  Pray  &  Co.,  received  June  2,  $2768.75, 
less  2  f . 

June  10. — F.  H.  Walling  &  Co.  paid  their  bill  of  June  4th,  less  2i. 

June  II. — Discounted  E.  H.  Smith  &  Co's  acceptance  of  June  5th,  at  the  City  Bank, 
and  had  the  net  proceeds  placed  to  your  credit. 

June  12. — Paid  James  Smith  &  Co's  draft  of  June  6th,  at  10  days  from  date,  for 
$2252.88,  less  discount  for  the  unexpired  time. 

June  12. — Sold  F.  H.  Walling  &  Co.,  on  their  note  at  4  months,  with  interest,  600 
yds.  Ingrain,  475  yds.  Matting,  1200  yds.  Lining,  less  s'^c 

June  13. — Bought  of  John  &  James  Dobson,  Philadelphia,  net  30,  2/10,  892  yds. 
Body  Brussels,  1225  yds.  Tapestry  Brussels. 

June  14. — Bought  of  Barton  Bros.,  Philadelphia,  net  4  mos.,  8  '15,  1500  yds.  Lino- 
leum, 1400  yds.  Oilcloth. 

June  15. — Knowles  &  Johnson  sent  you,  to  apply  on  account,  T.  H.  Sullivan's  note 
in  their  favor,  dated  Denver,  Colo.,  May  24,  190-,  at  90  days,  for  $742.28,  with  interest. 
Accepted  the  note  and  allowed  Knowles  &  Johnson  credit  for  its  face  and  the  interest 
due  upon  it. 

June  15. — Paid  John  H.  Pray  &  Co.  invoice  of  June  5th,  less  2^. 

June  16. — Discounted  the  Sullivan  note,  received  of  Knowles  &  Johnson,  at  the  City 
Bank,  and  had  the  net  proceeds  placed  to  your  credit.    (This  is  an  interest-bearing  note.) 

June  16. — Sold  J.  G.  Carter  «&  Co.,  on  acct.,  net  60,  2/10,  600  yds.  Linoleum,  480 
yds.  Oilcloth. 

June  17. — Drew  for  private  use,  pi 50. 

June  17. — Paid  clerks,  $75. 

June  18. — -Sold  E.  H.  Smith  &  Co.,  on  their  acceptance  at  30  days,  212  yds.  Axminster, 
305  yds.  Velvet,  250  yds.  Tapestry  Brussels. 

June  18. — Knowles  &  Johnson  paid  the  balance  of  their  account  of  June  8th,  less  2^ 
of  the  entire  bill. 

June  18. — Paid  note  and  interest  favor  of  Barton  Bros.,  due  this  day, 

June  20. — Sold  E.  B.  Ailing  &  Co.,  net  30,  2  10,  420  yds.  Moquette,  280  yds.  Body 
Brussels,  800  yds.  Lining. 

June  21. — Discounted  F.  H.  Walling  &  Co's  note  of  June  12th,  and  received  cash 
for  the  net  proceeds. 


132 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


June  22. — Bought  of  John  H.  Pray  &  Co.,  Boston,  net  60,  3  10,  897  yds.  Moquette, 
1745  yds.  Ingrain,  2400  yds.  Lming. 

June  23.— Bought  of  James  Smith  &  Co.,  New  York,  sight  draft  in  10  days,  722  j-ds. 
Axminster,  941  3'ds.  Velvet. 

June  23. — Paid  John  &  James  Dobson's  invoice  of  June  13th,  less  discount. 

June  24. — Sold  Reed  &  Savage,  on  their  acceptance  at  10  days,  less  2f?,  400  yds. 
Moquette,  712  yds.  Body  Brussels,  1200  5^ds.  lyining.     Deduct  2^i. 

June  25. — Bought  of  John  &  James  Dobson,  Philadelphia,  1892  3^ds.  Body  Brussels, 
671  yds.  Moquette,  3200  yds.  Matting. 

Gave  in  p'ayment  your  note  at  4  mos.  for  one-half  the  amount  of  the  invoice;  the 
balance  on  4  mos.  time. 

June  26. — Sold  Knowles  &  Johnson,  net  4  mos.,  2/15,  920  yds.  lyinoleum,  1220  yds. 
Oilcloth,  43  5^ds.  Axminster. 

June  27.— Sold  F.  H.  Walhng  &  Co.,  net  30,  2  10,  698  yds.  Moquette,  792  yds.  Body 
Brussels,  1500  yds.  Lining. 

June  28.— Sold  E.  B.  Alhng  &  Co.,  net  30,  2  '10,  390  yds.  Moquette,  822  yds.  Body 
Brussels,  975  yds.  Tapestry  Brussels. 

June  29. — Paid  Barton  Bros.'  invoice  of  14th,  less  8,^, 

June  30. — K.  B.  Ailing  &  Co.  desired  to  take  advantage  of  2'c  discount  on  their  pur- 
chase of  June  20th,  but  being  short  of  money,  they  sent  $1000  to  apply  on  account,  with 
the  request  that  they  be  allowed  discount  on  their  payment. 

June  30. — Paid  clerks,  $75.     Paid  freight  bills  to  date,  $68.92. 

INVENTORY. 

310  yds.  Moquette,  545  yds.  Ingrain,  1600  yds.  Lining,  722  5^ds.  Axminster,  500  yds. 
Tapestry  Brussels,  678  yds.  Body  Brussels,  3525  yds.  Matting,  700  yds.  Oilcloth,  941  yds. 
Velvet,  at  cost  price;  office  furniture  valued  at  $225. 


Cost  and  Selling  Price  Lists — ^June  Examination, 


CCST. 

1.87' 

1.05 
.62' 
,06% 

1.12'^ 

.66^ 
1-37'* 


Axminster    .    .    . 
Body  Brussels  .    . 

Ingrain 

Ivining 

Linoleum  .... 
Matting  .... 
Moquette  .... 
Oilcloth  .... 
Tapestry  Brussels 
Velvet 


1 

2 

3 

4 

5 

2.25 

2.27 

2.26 

2.24 

2.25 

1.50 

1.48 

1.49 

1-52 

1.50 

.87'' 

.87' 

.87' 

.87' 

.87 

.09 

.08 

.10 

.08' 

.09' 

•75 

.76 

•  74 

•  77 

•  75 

•50 

•  52 

•51 

.48 

•49 

1.62'' 

1.62' 

1.66% 

1.62' 

1.66%- 

■45 

•43 

■44 

.42 

.45 

.87' 

.S7' 

-V 

•87 

.87» 

I.67'' 

1.67' 

1.66M 

1.62' 

I.67-' 

6 


2.28 
1.48 

.87^^ 

.09 

.73 

.50 

1.67* 

•43 
.87" 

1.66^;, 


2.27 
1.50 
.86 
.lo- 
•75 
•52 
1.62^ 

.44 

.87- 

1.62' 


8 
2.25 

f) 

2.30 

1-53 

1.48 

■87^ 

.88 

.09 

.09'^ 

•  74 

•73 

•50 

•51 

i.66=i 

I.62« 

•15 

..(ft 

.87'' 

.87-^ 

1.67' 

1.62- 

10 

2.24 

1.50 

.87' 

.09 

.76 

•49 
i.67« 

■42 

■87' 

i.67« 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  133 

QUESTIONS. 

1 .  What  is  a  draft  and  what  names  are  given  to  its  parties  ? 

2 .  What  should  be  the  drawer' s  entry  when  a  draft  with  three  parties  is  drawn  ? 

3.  What  should  be  the  payee's  entry  for  a  sight  draft  received? 

4.  What  should  be  the  drawee's  entry  for  a  sight  draft  paid? 

5.  What  should  be  the  drawee's  entry  for  a  time  draft? 

6.  What  is  meant  by  "Accepting"  a  draft,  and  what  agreement  does  it  constitute? 

7.  What  should  be  the  payee's  entry  when  a  time  draft  has  been  accepted? 

8.  What  should  be  the  drawee's  entry  when  he  accepts  a  time  draft? 

9.  When  drafts  are  made  for  the  collection  of  debts  to  whose  order  are  they  generally 
payable  ? 

10.  What  .should  be  the  drawer's  entry  when  such  a  draft  is  made  if  it  is  a  sight 
draft  ?  What  entry  if  it  is  a  time  draft  ? 

11.  Define  a  bank  draft  and  explain  its  use. 

12.  To  whose  order  should  a  bank  draft  be  made? 

13.  How  should  a  bank  draft  be  indorsed ? 

14.  Explain  the  use  of  the  invoice  book. 

15.  To  what  account  should  the  footing  of  the  money  column  of  the  invoice  book 
be  posted?     To  which  side  of  the  account,  and  why? 

16.  Explain  the  use  of  the  bill  book. 

17.  What  are  articles  of  copartnership,  and  how  should  they  be  prepared? 

18.  When  should  interest  be  credited? 

19.  What  is  meant  by  a  shipment? 

20.  For  what  amormts  should  Shipments  account  be  debited? 

2 1 .  For  what  amounts  should  Shipments  account  be  credited  ? 

22.  Under  what  circumstances  would  a  bank  receive  a  sight  draft  on  deposit  ?    Suppose 
it  were  not  paid,  what  would  the  bank  do? 

23.  When  should  discount  be  credited? 

24.  When  should  interest  be  debited  ? 


134  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

COMMISSION,    SHIPPING    AND   GENERAL   MERCHANDISING    BUSINESS. 

A  large  variety  of  produce  and  manufactured  products  is  sold  through  the  medium  of 
agents  or  correspondents,  who  receive  a  certain  per  cent,  of  the  gross  sales  as  their  com- 
mission for  handling  the  goods.  Sometimes  the  price  is  fixed  by  the  person  shipping  the 
goods,  but  generally  it  is  left  to  the  discretion  of  the  commission  merchant,  who  obtains 
the  highest  price  possible  at  the  time  of  sale.  Frequently,  the  commission  merchant 
advances  a  part  of  the  value  of  the  goods  as  soon  as  they  are  received,  in  case  the  goods 
are  not  to  be  sold  at  once,  and  the  balance  is  remitted  after  the  sale  has  been  completed. 
When  the  goods  are  perishable,  advances  are  not  usually  made,  but  the  net  proceeds  are 
remitted  as  soon  as  the  sale  is  completed. 

The  person  who  sends  the  goods  to  the  commission  merchant  is  called  the  consignor; 
the  commission  merchant  is  designated  as  the  consignee.  Many  commission  merchants 
also  sell  merchandise  on  their  own  account,  and  make  shipments  to  others,  thus  conduct- 
ing a  regular  buying,  selling  and  shipping  business,  in  addition  to  their  commission  business. 

Books  Kept. — The  books  to  be  kept  in  this  business  are  sales  book,  account  sales 
register,  shipment  ledger,  cash  book,  invoice  book,  journal-daybook,  main  ledger,  and 
loose  leaf  consignment  ledger.  The  invoice  book  and  the  jovirnal-daybook  will  be  the 
same  as  those  you  have  heretofore  kept.  As  but  few  notes  appear  in  these  transactions, 
the  bill  book  will  be  dispensed  with. 

It  is  the  custom  of  most  commission  houses  to  enter  a  description  of  each  lot  of  goods 
received  in  a  book  called  the  receiving  book,  and  to  open  an  account  with  each  lot  luider 
an  appropriate  name  in  a  book  called  the  consignment  ledger.  Each  account  contains  on 
its  credit  side  all  sales  made  from  the  lot  of  which  it  is  the  record,  and  on  its  debit  side 
all  charges  against  this  lot.  When  the  lot  is  all  sold,  an  account  sales  is  rendered  to  the 
consigTior. 

By  the  use  of  the  loose  leaf  consignment  ledger,  a  description  of  which  follows,  the 
receiving  book,  consignment  ledger  and  account  sales  are  combined  in  one,  and  the  book- 
keeping is  greatly  simplified. 

Each  consignment  should  be  accompanied  by  a  letter  of  advice,  containing  the  list  of 
goods,  and  this  letter  should  be  compared  with  the  goods  when  they  are  received,  and  if 
there  is  any  shortage  the  consignor  should  be  notified  at  once.  The  receiving  clerk  gen- 
erally enters  the  goods  on  a  blotter  as  they  are  unloaded  from  the  trucks,  and  from  the 
blotter  the  bookkeeper  transfers  the  items  to  a  loose  leaf  of  the  consignment  ledger  (see 
model,  page  135). 

*  '^lH^  Consii^niiK'nt  T^odjAcr. — In  this  business,  when  goods  are  received  to  be  sold  on 
commis.sion,  the  consignment  will  be  entered  on  a  loose  sheet  of  the  consigtnncnt  ledger, 
as  shown  in  the  illustration  on  page  135. 

In  the  small  square  at  the  upper  right-hand  corner  of  this  loose  sheet  is  writleii  the 
stencil,  or  i)rivate  mark,  of  this  consignment,  and  every  package  in  the  consign  men  l  will 
be  marked  with  the  same  stencil.  These  stencil  marks  are  arbitrary,  aiul  an>-  letter, 
nvunber,  or  symbol  may  be  used.  In  this  business  the  initial  kttLT  of  i1k'  consignor  and 
the  number  of  his  con.signnient  will  be  used  as  a  stencil  uiaik.  The  loose  leaf  is  now- 
fastened  to  its  cover  and  becomes  a  ])art  of  the  consigmuenl  ledger.  TIr'  amount  of 
freight  as  shown  by  the  freight  bill,  which  will  accompany  the  goods,  should   he  eutered 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


135 


Loose  Leaf  Consignment  Ledger. 


Sale  of  Mcrchanoise  for  account  of 


"M^^A^^^^^^  y^^^^^ 


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*»   E.  H.  Reed  &  Company, 


COMMISSION    MERCHANTS, 


INVOICC    No.  - 


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INVOICE    OATC   . 


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ADVANCES. 


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COMMISSION,  ^^ /i> 


NET  PROCEEDS, 


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in  the  left-hand  or  debit  column  of  the  loose  leaf  opposite  Freight.  This  may  be  done  at 
the  time  the  goods  are  received,  or  later,  when  the  amount  is  taken  from  the  cash  book. 
As  the  goods  are  sold,  the  items  are  entered  in  the  space  under  Sales  on  the  loose  sheet, 
and  the  amounts  carried  to  the  right-hand  or  credit  column.  These  amounts  should  be 
taken  from  the  sales  book,  where  they  will  be  found  in  the  special  column  for  sales  from 
consignments.  The  contents  of  this  column  should  be  carried  to  the  consignment  ledger 
at  the  close  of  each  day. 

When  all  the  goods  which  make  up  the  consignment  have  been  sold,  the  right-hand 
or  credit  column  is  footed  and  the  amount  placed  at  the  bottom  of  the  loose  leaf. 

If  any  sight  drafts  have  been  paid  or  time  drafts  accepted  on  account  of  this  consign- 
ment, the  amount  should  be  placed  opposite  Advances  in  the  debit  column  of  the  loose 
sheet.  The  commission  should  now  be  calculated  and  also  any  charges  which  may  be 
due  for  cartage,  insurance,  storage,  or  other  items  of  expense.  In  this  business  these  items, 
except  commission,  will  be  combined  under  the  head  of  "Charges."  Enter  the  amount  of 
commission  and  of  charges  in  the  left-hand  or  debit  column  of  the  loose  sheet.     The  differ- 


136 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


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NAME   AND   EXri.A;!ATION. 


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ence  between  the  footing  of  the  ri<;ht-hand  cohnnn  and  the  sum  of  the  items  in  the  left- 
hand  column  of  the  loose  sheet  will  show  the  net  proceeds  or  amount  due  the  consignor, 
and  will,  of  course,  balance  the  two  columns  of  the  loose  sheet. 

All  writing  upon  the  consignment  ledger  should  be  done  in  copying  ink,  for  the  leaf 
is  now  removed  from  the  ledger,  and  a  copy  of  it  taken  in  the  impression  account  sales 
book,  the  leaf  itself  being  sent  to  the  consignor  with  a  check  or  draft  for  the  amount  of 
his  net  proceeds,  unless  the  net  proceeds  arc  placed  to  his  credit.  In  the  latter  case,  the 
account  sales  should  be  sent  without  the  remittance,  and  after  Net  proceeds  the  words 
Placed  to  credit  should  be  written.  It  is  important  that  a  good  copy  of  the  account  sales 
be  taken  in  the  impression  Ixjok,  for  should  any  dispute  arise  this  impression  book  will 
be  accepted  in  court  as  your  l)Ook  of  original  entry,  and  many  houses  post  charges,  com- 
mission and  net  proceeds  directly  from  this  book  to  their  respective  accounts  in  iIil'  ledger. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


137 


7 
f 
/z 

// 
// 

Z3 
23 
X3\ 

^7 
3e' 

3  / 
3/ 

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'S..<^^'^..d-^A=<^(^X^^^/z^-^.<^ 


NAME    AND    EXPLANATION 


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CoKSIOI«»«E.!*TS. 


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*  Red  ink  entrs-. 

Cash  Book. — In  this  business  the  cash  book  will  contain  several  extra  columns.  On 
the  debit  side,  the  column  for  merchandise  discount  will  contain  all  discounts  allowed  on 
merchandise  sold  to  other  persons  and  paid  for  within  the  terms  of  the  bill,  and  Cash  will 
be  debited  for  the  actual  amount  received  instead  of  being  debited  for  the  fuU  amount  of 
the  bill  and  credited  on  the  opposite  side  for  the  amount  of  the  discount,  as  in  previous 
work.  This  method  of  handling  merchandise  discount  is  much  in  favor  among  business 
houses,  and' will  be  used  in  the  transactions  of  this  month.  When  these  discounts  are 
posted,  they  are  carried  to  the  credit  of  the  person  who  has  paid  the  bill;  at  the  same 
time  he  is  credited  with  the  cash  which  he  pays.  This  necessitates  two  credit  entries  on 
the  personal  account  (see  form  of  ledger  account  with  merchandise  discount  postings  on 
page  155).  When  the  cash  book  is  posted,  the  total  of  the  Merchandise  Discount  column 
is  carried  to  the  debit  of  Merchandise  Discount  in  the  main  ledger.  The  General  column 
contains  all  cash  received  from  the  ordinary-  accounts  of  the  business.     The  Shipments 


138 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Shipment  Ledger. 


Index, 

Check 

and 

Folio. 


Jan.  2,  190-, 


A.  M.  Archer,  ::i,       Brooklyn,  N.  Y. 

100  brls.  Apples,  N.  S.,  2.80 

30  tubs  Butter,  1800  lbs.,  205A 

20  CSS.  Eggs,  S.  F.,  480  doz.,        15'/ 
Via  Nat'l  Despatch, 


F.  W.  Smith  Com.  Co.,  :;i, 

Boston,  Mass. 
250  brls.  Apples,  Baldwin,  2.50 

30  CSS.  Eggs,  S.  F.,  720  doz..        i5'/' 
Via  Nat'l  Despatch, 


D.  W.  Parks  &  Co.,  ::4,  Pittsburg,  Pa. 
2400  bu.  Potatoes,  35'/ 

20  brls.  Apples,  Baldwin,  2.45 

Via  Interstate  Line, 


Jas.  F.  Brennan,  ^i.  New  York. 

50  tubs  Butter,   3050  lbs.,  20'/' 

12  bxs.  Cheese,  1260    " 
Via  Interstate  Line, 


V 
Iir/ 


Shipments,  Dr. 
Mdse.,  Cr. 


Total 


tal| 


Mdse. 


280 

36c 

72 


625 
108 


912 
49 


610 
138 


60 


IvEDGER  Accounts. 


Debits. 


712 

73   90 


785 


733 


3154    60 


961 

17 


978 


748 


90 


50 


50 


60 


Credits. 


785 


90 


785    90 


942 

35 
978 


Folio  and 
Explanation. 


60 
90 


50 


C.  4 
Gain 


C.  5 
C.  4 
Loss 


Date. 


Jan. 


an. 


5 
16 


column  contains  all  cash  received  from  shipments,  and  as  soon  as  cash  is  received  from  a 
shipment  the  amount  is  carried  to  the  credit  of  that  shipment  in  the  shipment  ledger,  and 
the  total  of  Shipments  column  is  carried  to  the  credit  of  Shipments  in  the  main  ledger 
when  the  cash  book  is  posted. 

TIh'  (!r<'«lit  Coltiimis  oi'  the  ('asli  liook. — Merchandise  Discount  contains  discount 
on  all  bills  which  are  entitled  to  discount  when  paid  by  the  business,  and  the  persons  to 
whom  the  cash  is  sent  are  debited  for  the  discount  at  the  sanir  lime  they  are  debited  for 
the  actual  cash  sent,  requiring  two  debit  postings  (see  form,  page  155 ). 

When  the  cash  book  is  posted,  the  total  of  Merchandise  Discount  column  is  carried  to 
the  credit  of  Merchandise  Discount  in  the  main  ledger.  The  ("General  column  .should  l)e 
posted  as  in  the  cash  books  of  previous  work. 

All  cash  ])aid  on  account  of  shipments  for  freight,  insurance,  or  an}-  other  cause,  should 
be  entered  in  the  Shiimients  column,  and  also  on  the  del)it  side  of  ledger  accounts  in  the 
shipment  ledger,  and  the  total  of  this  cohimn  should  be  carried  to  the  debit  of  Shipments 
in  the  main  ledger  when  the  cash  Ixx^k  is  posted. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


139 


Sales   Book. 


Const. 
Lot  No. 


L.  F. 


<^.  //•. 


^- 


Invoice 
Extension. 


Sales  from 
Consignments. 


Sales  from 
Mdse, 


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140 


MODERiV    ILLUSTRATIVE    BOOKKEEnXG. 


Account  Sales 


Date. 

No. 

Consignor. 

Address. 

Total 
Sales. 

Freight    '       Coin- 
and  C'tge.  |    mission. 

Charges. 

Jan. 

ID 

24 
26 

30 

K-I 
J-2 

M-I 

K-2 

J.  M.  Kendall, 
E.  M.  Jackson, 
CD.  Martin, 
J.  M.  Kendall, 

Rochester,  N.  Y. 
Elmira, 
Utica, 
Rochester,      " 

203 

774 

582    60 
225 

10 
64 
22 

7 

60 
40 
50 

10 

38 
29 
II 

15 
70 

13 
25 

I 

4 
2 

I 

75 

5^ 
50 

89 

23 

9 

75 

All  cash  paid  on  account  of  consignments,  whether  for  freight,  advances,  or  proceeds 
remitted,  should  be  placed  in  the  Consignments  column  and  carried  to  the  loose  leaf 
consignment  ledger,  and  the  total  of  this  column  posted  to  the  debit  of  Consignments  in 
the  main  ledger  when  the  cash  book  is  posted. 

In  balancing  the  cash  book,  the  footing  of  the  Shipments  column  on  the  debit  side 
should  be  added  to  the  footing  of  the  General  column,  and  the  footings  of  the  Shipments 
and  Consignments  columns  on  the  credit  side  should  be  added  to  the  footing  of  the  Gen- 
eral column  (see  model  cash  book  with  special  columns). 

Sales  Book. — The  sales  book  contains  a  special  column  for  sales  made  from  consign- 
ments, and  an  Invoice  Extension  column,  which  should  contain  the  items  and  the  total 
•of  the  bill  given  the  purchaser,  who,  as  a  rule,  does  not  know  whether  the  goods  are 
purchased  from  a  consignment  or  from  the  stock  of  the  business. 

When  sales  are  entered  in  the  sales  book,  the  stencil  mark  of  the  consignment  should 
be  written  opposite  those  items  which  are  taken  from  consignments,  and  the  amounts 
should  be  placed  in  the  Sales  from  Consignments  column,  as  well  as  in  the  Invoice 
Extension  column.  The  amounts  of  such  items  as  are  sold  from  the  stock  of  the  business 
should  be  placed  in  the  Sales  from  Merchandise  column. 

When  the  sales  book  is  posted,  the  total  of  Sales  from  Consignments  should  be  carried 
to  the  credit  of  Consignments  in  the  main  ledger,  and  the  total  of  the  Merchandise  column 
to  the  credit  of  Merchandise  in  the  main  ledger. 

In  this  month's  work  cash  sales  will  not  be  posted  to  the  debit  of  the  person  making 
the  purchase,  as  in  the  previous  month,  and  then  j^osted  back  to  his  credit  from  the  cash 
book,  but  such  sales  will  be  checked  off  in  the  sales  book  and  also  in  the  cash  book,  and 
not  posted  to  the  personal  account  from  either  book.  This  method  of  handling  sales  for 
cash  is  used  where  there  is  no  special  desire  to  keep  a  record  of  the  amount  of  business 
transacted  with  each  customer,  and  it  will  be  seen  that  it  .saves  a  considerable  amount  of 
posting  where  cash  sales  are  numerous  (see  E.  M.  L,acy  entries  in  form  of  cash  book  and 
form  of  sales  book,  pages  136  and  139). 

SiiipiiKMit  L<'<lj;<'r. — When  goods  are  sent  to  oilier  persons  to  be  sold  on  commission, 
the  date  of  shipment  is  written  in  the  shipment  ledger,  with  the  name  and  address  of  the 
consignee  and  the  number  of  the  shipment;  IIrii  follows  a  descrijUion  of  the  merchandise 
slii])ped,  with  the  price,  which,  in  a  regular  shipping  business,  should  he  the  cost  of  the 
goods. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


141 


Register. 


Pk'gs  Ret'd. 

Total 

Charges. 

Advances. 

Net 
Proceeds. 

Check  or 
Draft. 

Amount 

Charged  to 

Account. 

I,.  F. 

N.^ME  OF  Account 

5  bxs. 

21 

I07 
53 

20 

90 

30 
03 
25 

300 
200 

181 

366 

329 
204 

10 

70 

57 
75 

181 

329 
204 

10 

57 
75 

366     70 

89     23 

9,75 
465  1  68 

74 

58 
59 
47 

E.  M.  Jackson, 

Commission, 

Charges, 

Consignments, 

Cr. 

Cr. 
Cr. 
Dr. 

* 

In  the  debit  column ,  under  Ledger  Accounts,  should  be  written  the  value  of  the  mer- 
chandise as  shown  in  the  Merchandise  column,  and  to  this  column  is  also  posted,  from  the 
cash  book  or  other  sources,  all  expenses  inciu-red  on  account  of  this  shipment. 

When  an  account  sales  of  a  shipment  is  received,  the  shipment  is  credited  for  the  net 
proceeds  from  the  cash  book  "or  journal,  and  since  this  disposes  of  the  shipment,  the  ledger 
part  of  it  is  closed  by  writing  the  amount  of  gain  or  loss  on  the  smaller  side  of  the  account, 
and  ruling  and  footing  (see  models,  A.  M.  Archer  and  D.  W.  Parks  &  Co.,  page  138). 

WTien  the  books  are  posted  preparatory  to  the  taking  of  a  trial  balance,  the  total  of 
the  Merchandise  column  in  the  shipment  ledger  is  carried  to  the  debit  of  Shipments  and 
to  the  credit  of  Merchandise  in  the  main  ledger  (see  form  of  shipment  ledger). 

Account  Sales  Reg-ister. — This  book  is  kept  for  convenience  in  posting  commission 
and  charges,  and  contains  columns  for  the  date,  stencil  mark  of  the  consignment,  address 
of  the  consignor,  amount  of  gross  sales,  freight,  commission,  charges,  goods  returned, 
total  charges,  adA^ances,  net  proceeds,  cash  remitted,  amount  charged  to  account,  folio, 
name  of  account. 

If  accounts  are  kept  with  insm-ance,  cartage,  storage,  etc.,  of  course  columns  would  be  added  for 
these  accounts,  as  well  as  for  commission  and  charges.  In  this  month's  work  all  these  accounts  are 
included  under  the  general  head  Charges. 

When  an  account  sales  is  rendered,  the  necessary  information  should  also  be  entered 

in  the  account  sales  register,  and  at  the  time  of  the  general  posting  before  a  trial  balance  is 

taken,  the  footings  of  Commission  and  Charges  columns  should  be  carried  to  the  Amount 

Charged  to  Account  column,  and  the  names  Commission  and  Charges  written  in  the  Name 

of  Account  column  opposite  these  amounts  in  the  account  sales  register,  while  the  total  of 

Amount  Charged  to  Account  column  should  be  posted  to  the  debit  of  Consignments,  and 

the  items  which  make  up  this  total  posted  in  the  main  ledger  to  the  credit  of  the  accounts 

to  which  they  belong. 

If  an  impression  of  the  loose  leaf  consignment  ledger  is  taken  when  an  account  sales  is  rendered, 
the  account  sales  register  may  be  dispensed  with,  as  the  commission  charges  and  net  proceeds  may  be 
posted  directly  from  the  impression  book. 

Letter  Impression  Book. — In  most  business  houses  it  is  the  custom  to  keep  a  copy 
of  every  written  order,  letter,  postal  card,  account  sales,  deposit  slip,  etc.,  which  leaves 
the  house  in  the  course  of  its  business,  as  it  is  often  of  great  importance  that  ready  refer- 


142 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


M 
O 
O 

O 

m 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


143 


Journal  Entries. 
July  I,  I  go-. 


Eilis  H.  Reed  and  (student's  name)  have  this  day  en- 
tered into  a  partnership  to  cart}'  on,  at  312  South  St.,  the 
Commission  and  General  Merchandising  business,  under  the 
name  of  E.  H.  Reed  &  Co. 

Each  partner  is  to  give  his  entire  time  to  the  business, 
and  shall  receive  six  per  cent  interest  on  his  net  invest- 
ment, after  which  the  gains  and  losses  shall  be  divided 
equallv. 

Ellis  H.  Reed  invests  the  following,  for  which  he  is 
credited. 

Real  Estate  valued  at 

Mdse.  "      " 

Horses  and  Wagon  "      " 

Furniture  and  Fixtures  "       " 

Theodore  Crosbv  &  Co.  balance  acct. 

A.  W.  Noone  &'Co. 
Public  Market 
Geo.  H.  Tucker  &  Co. 

Citv  Hotel  Co.  <<  u 

E.  H.  Reed 

Ellis  H.  Reed  is  debited  for  his  liabilities  assumed  by 
the  business  as  follows: 
E.  H.  Reed 

Russell  &  Birkett  balance  acct. 

Curtice,  Olney  &  Co. 

Lutz  Bros.       "  <<  << 

Gillette  &  Hennigan 

Bills  Pay. 


Note  favor  Fischer  Flour 
Co.,  St.  Louis,  dated 
June  i6th,  at  30  days. 


(Student's  name)   invests  cash,  I5000   (C.   B.)   and  a 
shipment,  ::3  to  T.W.  Bowen  &  Co.,  Dover,  valued  at  $1955, 
for  which  he  is  credited. 
Shipments 

(Student) 


9500 

916 

55 

325 

250 

129 

33 

528 

44 

244 

60 

204 

13 

250 

45 

12348 

3853 

82 

426 
1326 
714 
541 
845 

1955 

00 

1955 

50 


45 
40 

50 
20 
27 


00 


ence  may  be  had  to  such  documents.  This  copj^  is  obtained  by  means  of  a  letter  impres- 
sion book,  which  is  made  up  of  leaves  of  tissue  paper,  and  a  copy  may  be  taken  in  this 
book  from  either  a  pen-written  or  a  type-written  sheet.  If  proper  ink  is  used,  several 
copies  may  be  taken  from  the  same  original. 

Wlien  letters  or  invoices  are  copied  in  the  letter  impression  book,  they  shotild  be 
indexed  at  once  for  ready  reference.  (See  form  of  letter  impression  book,  page  142, 
showing  the  proper  indexing. ) 

ludexiug-. — It  is  important  that  all  ledgers,  as  well  as  letter  impression  books,  be 
properly  indexed. 

The  vowel  index  shown  in  the  model  letter  impression  book  is  an  excellent  method  of 
indexing,  when  the  index  is  a  part  of  the  book  itself,  but  the  ledger  index  is  generally 
a  separate  book,  of  which  there  are  several  labor-saving  varieties  on  the  market. 

Some  bookkeepers,  before  posting  a  book,  take  the  index,  and  from  it  page  each  item 
in  the  book  from  which  posting  is  to  be  done,  by  writing  in  the  folio  column  the  page  of 
tne  account  in  the  ledger.     After  all  the  items  to  be  posted  have  been  paged,  then  each 


144  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

Cash  Book  Entry. 


July 


investment  5000   00 


amount  is  carried  to  the  ledger  page  indicated,  and  a  check  mark  (y/)  placed  next  to  the 
folio  figures.  If  the  ledger  contains  a  large  number  of  accounts,  this  method  of  posting 
will  save  time  and  also  prevent  errors,  as  the  check  mark  is  a  double  proof  that  the  posting 
has  been  done.  In  actual  practice  every  good  bookkeeper  will  soon  memorize  the  pages 
of  all  his  principal  ledger  accounts,  and  not  be  obliged  to  refer  constantly  to  his  index. 

WORK    FOR    THE    STUDENT. 
July  i. 

You  have  accepted  a  proposition  to  form  a  partnership  under  the  name  of  E.  H.  Reed 
&  Co.,  with  Ellis  H.  Reed,  who  has  been  engaged  in  the  Country  Produce  and  General 
Merchandising  business,  at  312  South  St.,  your  city.  You  are  to  invest  S5000  cash, 
which  you  will  procure  from  your  teacher,  and  also  the  shipment  to  T.  W.  Bowen  &  Co. 
No.  3,  valued  at  $1955,  making  a  total  investment  of  $6955.00.  Ellis  H.  Reed  ow^ns  the 
building  at  312  South  St.,  valued  at  $9500.  He  makes  a  bill  of  sale  of  this  property  and 
transfers  it,  by  deed,  to  E.  H.  Reed  &  Co.  He  also  invests  tw^o  horses  and  a  delivery 
wagon,  valued  at  $325,  and  office  furniture  and  fixtures,  valued  at  $250.  He  has  on 
hand  the  following  goods:  600  bu.  potatoes,  invoiced  at  605;^  per  bu.;  140  brls,  apples, 
invoiced  at  $3.50  per  brl.;   ii  boxes  cheese,  605  lbs.,  invoiced  at  ii^i^  per  lb. 

The  following  personal  balances  from  customers  are  due  Ellis  H.  Reed:  Theodore 
Crosby  &  Co.,  $129.33;  A.  W.  Noone  &  Co.,  $528.44;  Public  Market  Co.,  $244.60;  Geo. 
H.  Tucker  &  Co.,  $204.13;  City  Hotel  Co.,  $250.45. 

Ellis  H.  Reed  owes  the  following  balances:  Russell  &  Birkett,  $426.45;  Curtice,  Olney 
&  Co.,  $1326.40;  Lutz  Bros.,  $714.50;  Gillette  &  Hennigan,  $541.20;  and  a  note  in  favor 
of  the  Fischer  Flour  Co.,  St.  Ivouis,  dated  June  i6th,  at  30  days,  $845.27. 

The  new  firm  assumes  all  the  liabilities  of  Ellis  H.  Reed  and  takes  his  resources. 
Each  partner  is  to  receive  interest  at  six  per  cent,  on  his  net  investment,  after  which  the 
gains  and  losses  are  to  be  divided  equally. 

The  forms  on  pages  143  and  144  show  the  journal  and  cash  book  entries  for  the  invest- 
ments of  Ellis  H.  Reed  and  j^ourself. 

Take  your  investment,  $5000,  from  the  cash  you  received  in  settlement  of  June 
accounts  with  H.  F.  Adams,  and  place  it  in  Cash  Drawer.  Carry  the  shipment  to  T.  W. 
Bowen  &  Co.  to  the  shipment  ledger,  exactly  as  shown  on  page  150. 

Prepare  articles  of  copartnership,  embodying  the  conditions  given  in  the  above  state- 
ment of  the  business,  and  present  them  to  your  teacher  for  approval.  He  will  sign  for 
Ellis  H.  Reed.  Sign  your  own  name  and  ask  some  other  student,  or  your  teacher,  to 
sign  his  name  as  witness. 

Prepare  a  circular  letter,  soliciting  shipments  of  country  produce  or  general  merchan- 
dise, and  mail  a  copy  to  each  out  of  town  customer  with  whom  you  did  business  in  June. 
These  are  all  country  merchants,  and  are  likely  to  have  such  goods  to  dispose  of.  The 
following  is  a  form  of  circular  letter. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  145 

Form  of  Circular  Letter. 

Mr.  Geo.  H.  Axling,  Albany,  N.  Y.,  July  i,  1900. 

Utica,  N.  Y. 

Dear  Sir, — We  desire  to  call  attention  to  the  fact  that  we  have  opened  at  348  Central  St.,  this  city,  a 
large  and  commodious  store  for  the  handling  of  every  variety  of  country  produce — butter,  eggs,  fruit, 
vegetables — and  canned  goods,  to  be  sold  on  commission.  We  shall  also  conduct  a  general  merchandising 
business,  and  are  prepared  to  buy  anything  in  the  above  line  at  the  highest  market  rates. 

We  solicit  shipments  of  first-class  goods  onl)%  and  are  prepared  to  make  cash  advances  for  all  staple 
goods  on  receipt  of  bill  of  lading.  We  render  accounts  sales  and  send  cash  remittances  as  soon  as  consign- 
ments are  disposed  of.     Our  charges  are  5'?  of  sales  and  15?  for  storage  and  insurance. 

We  refer,  by  permission,  to  the  First  National  Bank  and  the  American  Express  Company  of  this  city. 

Soliciting  your  patronage,  we  remain, 

Verj'  respectfull}-  yours. 

The  Geo.  H.  White  Commission  Co. 

Order  from  Gillette  &  Hennigan,  Baltimore,  Md.,  at  their  lowest  cash  discount,  20 
boxes  St.  John's  River  oranges,  50  boxes  lemons,  12  doz.  pineapples. 

Order  from  Russell  &  Birkett,  Penn  Yan,  N.  Y.,  on  account,  30  days,  50  brls.  XXX 
family  flour,  50  brls.  XX  family  flour,  25  brls.  pastry  flour. 

Order  from  Curtice,  Olney  &  Co.,  Rome,  N.  Y.,  36  cases,  72  doz.,  canned  sugar  corn; 
72  cases,  144  doz.,  canned  tomatoes.  Order  these  sent  by  Interstate  Transportation 
Company,  fast  freight,  and  request  them  to  draw  on  you  at  30  days  for  the  amotmt  of 
the  bill. 

Order  from  Lutz  Bros.,  Allegheny,  Pa.,  5  brls.  sour  pickles,  4  brls.  sweet  pickles,  25 
cases,  50  doz..  Diamond  ketchup,  16  oz.  Order  the  goods  shipped  by  Interstate 
Transportation  Company,  and  request  60  days'  credit. 

The  above  letters  should  be  very  carefully  prepared  in  copying  ink,  and  after  approval 
by  your  teacher,  an  impression  of  each  letter  should  be  taken  in  the  letter  book.  Ask 
your  teacher  to  show  you  the  method  of  taking  an  impression  in  this  book. 


Com. — 10 


146 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


ROUTINE  OF  JULY  COMMISSION    BUSINESS. 
Commencing  July  i6,  1900. 

Xo.  1. — This  advice  of  shipment  accompanies  a  lot  of  goods  received  from  E.  Mason 
&  Co.,  of  Milford,  your  state,  to  be  sold  on  their  account  and  risk. 

Take  from  your  package  of  business  forms  the  pad  of  loose  leaf  sales  blanks,  and  in 
the  square  at  the  top  write  the  stencil  mark  of  this  consignment,  which  will  be  M-i  (see 
form  of  loose  leaf  sales  blank  below).  Fill  out  the  sales  sheet  with  the  date  of  ship- 
ment, name  of  consignor,  etc.  Opposite  Received  write  the  articles  as  shown  by  the 
advice  received  with  the  goods,  as  follows  : 


Form  of  Loose  Leaf  Sales  Blank. 


SALE   OF   t 

MrncHftNDiSE  FOH  ACCOUNT  OF  .    (/D .   ^ /^ /-^■''J^^.^^'Z--'^-'^^^ {''^(r^l^xA 

2^-/ 

'^^yj.^-r^ 

//                                           (Yoor  sulc) 

«*  E.  H.  Reed  &  Company, 

COMMISSION    MERCHANTS, 

y 

(Your  place  here ) 

Invoice  DATE       ,j^^..>'iC^^  / ^     190 

^      , 

/                 '                                                                                                                                                 (Write  your  own  name  here.i 

/Z^ 

X 

roue 

RECEIVED.  /^— 2^^>i!:^2^-:?C?^^i.!iikl<i<»^  /  ^^i:,<£<d^,  ^^-^s-^^ 

FREIGHT.  CARTAGE,  ETC. 

ADVANCES- 
SALES. 

t 

COMMISSION. 

CHAROC8, 

NET  PROCEED*. 

1 

Paste  the  gununed  edge  of  the  loose  slieel  to  tlie  back  of  tlie  cover  of  the  consignnient 
ledger.    Place  the  advice  of  shipment  in  your  Incoming  Vouchers  (consignment  envelope ). 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  147 

No.  2. — This  advice  of  shipment  is  received  with  goods  mentioned  from  the  Western 
New  York  Preserving  Company,  Spring\nlle,  N.  Y.,  and  should  be  entered  precisely  as  the 
lot  received  in  No.  i.     Paste  the  gummed  edge  on  the  back  of  No.  i. 

No.  3. — This  letter  has  been  received  from  Rice  &  Pond,  accompanying  goods  as 
mentioned.     (Enter  as  in  Nos.  i  and  2.) 

No.  4. — This  invoice  is  for  goods  ordered  by  you  July  loth,  and  should  be  entered  in 
the  invoice  book,  as  in  previous  work.      (Verify  the  calculations.) 

No.  5. — This  invoice  is  for  books  and  other  office  supplies. 

Place  the  invoice  in  your  Voucher  File,  as  only  merchandise  invoices  should  be  put  in 
your  invoice  book,  but  make  no  entry  at  present.  The  amount  will  be  found  in  your 
cash  items  to  be  paid  at  the  end  of  the  day,  and  entered  at  that  time. 

No.  6. — This  invoice  is  for  goods  ordered  by  you  July  loth,  and  should  be  entered  in 
the  invoice  book  as  in  No.  4. 

Sales  from  Blotter. — In  this  month's  work  a  large  number  of  sales  will  be  made  to 
local  persons.  No  orders  will  be  received  for  these  sales,  since  most  of  the  orders  are 
given  verbally  and  are  entered  in  an  order  book  or  blotter.  You  will  receive  among  your 
incoming  vouchers  a  list  of  these  sales  each  day,  and  will  make  out  the  bills  as  usual.  In 
entering  these  sales  in  the  sales  book  be  sure  that  the  stencil  mark  of  the  consignment 
appears  opposite  each  item  sold  from  that  consignment,  and  that  these  items  are  carried 
into  the  Sales  from  the  Consignments  column  of  the  sales  book. 

No.  7. — These  sales  have  been  made  as  per  blotter,  and  should  be  entered  in  the  sales 
book  (see  model,  page  139).  Be  sure  that  the  cash  sale  is  entered  in  the  cash  book,  and 
checked  off  both  in  cash  book  and  in  sales  book  (see  explanation,  page  140). 

In  this  month's  work  an  account  will  be  kept  with  freight,  and  all  amounts  paid  for 
freight  on  your  own  merchandise  will  be  charged  to  this  account  instead  of  to  Merchan- 
dise account. 

No.  8. — This  is  an  order  on  the  cashier  to  pay  various  bills. 

Enter  in  your  cash  book,  debiting  the  proper  accounts.  Allow  a  line  for  each  charge 
for  freight  paid  on  consignments,  writing  the  name  of  the  consignment  in  explanation 
space.  Pay  the  items  in  currency.  Enter  freight  charges  on  consignments  opposite 
Freight  on  the  proper  sheets  in  the  consignment  ledger.  Remember  to  debit  Freight 
for  all  freight  paid  on  your  own  merchandise. 

No.  9. — This  account  sales  is  received  from  T.  W.  Bowen  &  Co.,  and  as  they  have 
been  notified  of  the  change  in  your  business,  they  have  made  the  draft  payable  to  E.  H, 
Reed  &  Co. 

Enter  in  your  cash  book,  crediting  shipment  to  T.  W.  Bowen  &  Co.  No.  3,  for  the 
amount  of  the  net  proceeds,  and  carrying  the  amount  of  net  proceeds  to  the  credit  of 
shipment  No.  3  in  shipment  ledger.  There  has  been  a  gain  on  this  shipment.  Close  the 
shipment  in  shipment  ledger  by  writing  Gain  on  the  debit  side  (see  page  150). 

No.  10. — This  check  has  been  received  from  T.  Crosby  &  Co.,  in  fuU  of  account,  and 
is  indorsed  over  by  E.  H.  Reed  to  E.  H.  Reed  &  Co. 


148 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


No.   11. — Open  an  account  with  the  Traders  Bank,  and  deposit  $4900  cash,  the  check 
of  Theodore  Crosby  &  Co.,  and  the  draft  received  from  T.  W.  Bowen  &  Co. 
At  the  close  of  each  day: 

First,  carry  the  sales  from  consignments  from  the  sales  book  to  the  loose  leaf  consign- 
ment ledger  under  Sales.  Be  sure  that  you  get  the  right  stencil  mark,  and  place  a  check 
mark  against  each  item  in  the  sales  book  as  it  is  transferred  (see  form,  page  149). 

Second,  carrj'  each  item  paid  for  consignments  to  the  consignment  ledger  under 
Charges,  Advances,  etc. 

Third,  carry  any  cash  received  from,  or  paid  on  account  of,  shipments  to  the  shipment 
ledger  (see  model,  page  138). 

The  following  shows  the  sales  sheet  in  consignment  ledger  after  the  sales  of  July  i6th 
and  the  freight  charges  have  been  carried  to  it  from  the  sales  book  and  the  cash  book  at 
the  close  of  the  da3^ 


SALE   OF   1 

SAERCHANDISE   FOR   ACCOUNT  OP   .     OO       ^^VX^<e7_-,<^^<?'-5??'^/^'^^^i'^<^ 

y^-/ 

^^jz^;..^^ 

^/                    /   '                   (Tour  state.) 

^'  E.  H.  Reed  &  Company, 

COMMISSION    MERCHANTS, 

/                                                                                         (Your  place  here  ) 

IINVOiet  OATC          X'lC^^'iC-^^  /J-     ISO 

HAM* 

OCfl. 

^ 

/                                                                                                                                                                   (Write  your  own  Dame  here.) 

/Zj^ 

/^ 

roi.ie- 

RCCEivto.    /^— 2S^^-i:^T:^":?t?^^^«iil<£-^»-~~  /  <^,'-iU;^U^>  ^^-^^-c^ 

/C 

C-3 

FREIGHT,   CARTAGE.    ETC. 

ADVANCES. 

SALES. 

^ 

2-iP 

/ 
/ 

2- 

^jr.^<:.,d^,  0^^:^^  /J.^a^.  2^^Zc^-^^^^£,^l^l^..7^/2.^^ 

COMMISSION, 

CHAnCES. 

NET   PROCEEDS. 

/  C  fi 

J-/ 

MODERN    ILLUSTRATIVE    BOOKKEEPING. 


149 


The  following  is  an  illustration  of  the  sales  book  with  the  first  charge  for  July  i6th, 
showing  the  method  of  entering  sales  from  consignments  and  regular  merchandise  sales 
together.  The  check  marks  show  that  the  amount  of  merchandise  sold  from  the  consign- 
ment has  been  transferred  to  the  consignment  ledger. 

Commission  Sales  Book. 
July  i6,  190-. 


V 
V 

Invoice. 

CONSTS. 

Mdse. 

M-i 
M-i 

City  Hotel  Co. 
5  Cases  Eggs 
2  tubs  Butter 
2  boxes  Lemons 

a/  c 

120  dz. 
120  lbs. 

30  days 

.22 

.24 

4-75 

26 
28 

9 

40 
80 
50 

55 

20 

9 

50 

64 

70 

No.  12. — July  17.  This  invoice  has  been  received  from  Curtice,  Olney  &  Co. 
(Enter  in  your  invoice  book  as  usual.) 

No.  13. — This  advice  of  shipment  accompanies  goods  received  from  Fischer  Flour  Com- 
pany, and  incloses  a  draft  at  ten  days'  sight  for  $300,  which  you  will  accept,  payable  at 
Traders  Bank,  and  place  in  Bills  Payable  File. 

Enter  the  shipment  on  a  loose  leaf  sales  sheet,  and  under  Advances  write,  the  amount 
of  the  draft,  $300.  Make  a  journal  entry,  debiting  Consignments  and  crediting  Bills  Pay- 
able for  the  amount  of  the  draft,  as  follows. 


Consignments 

Bills  Payable 


Accepted  Fischer  Floiu-  Co's. 
draft  at  lo  days,  on  account  of 
goods  received  to  be  sold  on 
their  account  and  risk. 


300 


00 


300 


00 


No.  14. — This  order  is  received  from  Varick  &  Co.  Take  the  canned  goods  from 
lot  W-i — peas,  $1.30;  corn,  $1.10;  tomatoes,  $1.25;  and  the  balance  of  the  order  from 
your  own  goods — apples,  $3.75";  potatoes,  75^/.  (Enter  in  the  sales  book,  as  per  model, 
page  139.)     Do  not  forget  the  stencil  mark. 

No.   15. — This  letter  calls  for  a  shipment  from  you. 

Make  a  shipment  invoice — apples,  $3.50;  potatoes,  60^' — and  enter  in  your  shipment 
ledger  (see  form,  page  138) .    Pay  for  insurance,  75^',  currency,  and  enter  in  the  cash  book. 

The  following  is  the  form  of  the  shipment  ledger  as  it  will  appear  after  this  entry  has 
been  made,  and  after  the  cash  paid  for  insurance  has  been  brought  from  the  Shipment 
column  of  the  cash  book  at  the  close  of  the  day. 


150 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Shipment  Ledger. 


Index, 

Check 

and 

Folio. 

July  i6,  190-. 

IVTHcfa 

lyEDGER  Accounts. 

Debits. 

Credits. 

Folio  and 

Explanation. 

1 

Date. 

T.  \V.  Bowen  &  Co.,  ^3,            Dover, 

Shipped  June  24, 

Investment  of  (Student's  name), 

17 

F.  H.  Larkin  &  Co.,          Northboro, 

50  brls.  Apples,                               3.50 

200  bu.  Potatoes,                                 dof 

175 
120 

1955 
103 

62 

2058 

62 

C.  2 
Gain 

C.3 

July 

16 

2058 

62 

2058 

62 

295 

75 

No.   IG. — These  sales  have  been  made  from  the  blotter,  and  should  be  entered  in  the 

sales  book.     The  cash  should  be  entered  in  the  cash  book  (see  transaction  No.  7). 

The  small  cash  sale  of  merchandise,  |6,  is  not  entered  in  your  sales  book,  but  charged  direct 
to  the  credit  of  Merchandise  from  the  cash  book.  In  every  business  there  will  be  more  or  less  of  these 
small  sales,  even  though  it  be  strictly  wholesale  business,  for  it  is  quite  a  common  practice  among  busi- 
ness houses  to  send  in  friends  with  a  request  that,  as  a  favor,  a  small  quantity  of  goods  be  sold  them  at 
wholesale  prices,  and  it  is  customary  for  a  wholesale  house  to  comply  with  such  a  request.  If  such  sales 
are  made  from  consignments,  it  is  necessary  that  they  be  entered  in  the  sales  book,  but  when  made  from 
yotxr  own  goods,  it  is  customary  to  enter  them  in  the  cash  book  only,  and  post  to  Merchandise  account 
direct  from  that  book.  If  many  such  sales  are  occurring,  it  is  well  to  have  a  special  column  for 
merchandise  sales  in  the  cash  book.  In  this  business,  as  there  are  onh-  a  few  sales  of  this  nature,  they 
will  be  carried  to  the  General  column  of  the  cash  book,  and  Merchandise  account  credited  from  that  book. 

Xo.  17. — This  invoice  is  for  goods  ordered  by  you  July  loth,  and  should  be  entered 
in  the  invoice  book  as  usual. 

No.  18. — These  items  should  be  entered  in  the  cash  book,  and  the  item  of  $55  also 
entered  in  the  consignment  ledger,  opposite  Charges,  on  the  loose  leaf  for  Fischer  Flour 
Go's,  consignment.  Write  checks  for  all  bills,  except  the  one  of  $10  for  care  of  horses. 
Pay  this  in  cash. 

No.  11). — This  check  is  received  with  an  order  from  A.  W.  Noone  &  Co.  Place  the 
check  in  Cash  Drawer  and  make  cash  book  entry,  but  carry  the  order  over  until  the  iSth. 

No.  20.— Deposit  checks  of  W.  B.  Alden  &  Co.  and  A.  W.  Noone  &  Co. 

No.  21. — July  18.  Render  an  account  sales  to  E.  Mason  &  Co.,  and  enclose  a  New 
York  draft  for  the  amount  of  the  net  proceeds. 

Instructions. — Turn  to  j^our  consignment  ledger  and  see  that  all  sales  from  this 
consignment,  M-i,  have  been  transferred  from  the  sales  book  to  the  second,  or  sales, 
column  of  the  loose  sheet  stenciled  M-i  in  the  consignment  ledger.  Foot  this  second,  or 
sales,  column,  and  place  the  amount  at  the  bottom  of  the  page.  Find  the  commission  at 
5^,  and  write  in  the  first  column  of  the  loose  sheet  the  amount,  $/j.j^.  Take  r/  of  the 
sales  for  insurance,  storage,  etc.,  and  place  it  against  the  word  CJiargcs,  under  which  head 
insurance,  storage,  etc.,  will  be  kept  in  the  ledger.  Subtract  the  sum  of  the  amounts  in 
the  first  column  from  the  footing  of  the  second  column,  and  place  the  difference  opposite 
Net  Proceeds  in  the  first  column  of  the  loose  sheet  (see  model,  page  152).     This  is  the 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


151 


amount  to  be  sent  to  E.  Mason  &  Co.  This  amount  is  to  be  sent  by  New  York  draft,  the 
cost  of  which  you  will  pay.  Make  out  a  check  for  the  amount  of  the  net  proceeds  of 
the  consignment  plus  25  cents,  the  cost  of  the  draft. 

The  following  is  a  form  of  check  to  be  used  in  the  purchase  of  New  York  drafts. 


f/^ 


^^^/  /r^  y^/<^ 


7 


■am^r^7^^t'?'(^i:k 


r:^^^^.^^V.--'^^.^.C-^-~y^-77^^^ 


/  iP  & 


^:^'/urAJ 


IN  COLLEGE  CURRENCY. 


Take  this  check  to  the  bank  and  purchase  a  New  York  draft,  payable  to  your  own 
order,  for  the  amount  of  E.  Mason  &  Go's,  net  proceeds.  Indorse  the  draft  over  to  E. 
Mason  &  Co. 

Enter  in  your  account  sales  register  the  information  called  for  in  the  columns  of  that 
book  (see  pages  140  and  141),  taking  the  amounts  from  the  loose  sheet  after  it  is  footed. 

The  form  on  page  152  shows  the  loose  sheet  of  E.  Mason  &  Co's.  consignment  No.  i 
as  it  should  appear  at  the  present  time. 

Enter  in  your  cash  book,  debiting  Consignments  (Mason  &  Co's.  const.  No.  i)  for  the 
amount  of  the  draft,  and  Expense  for  the  cost  of  the  draft,  25^/.  (If  a  large  number  of 
New  York  drafts  is  sent,  so  that  there  would  be  a  considerable  amount  paid  for  exchange, 
an  account  with  collection  and  exchange  should  be  kept,  but  in  this  business  it  is  not 
thought  advisable  to  open  such  an  account,  and  Expense  is  debited  for  the  exchange  on 
drafts.)  Balance  the  loose  sheet  in  your  consignment  ledger.  If  your  work  is  correct, 
the  columns  will  foot  alike.  Remove  the  loose  sheet  from  the  ledger  and  take  an 
impression  of  it  in  the  letter  book.  Place  the  New  York  draft  and  the  loose  sheet  (M-i) 
in  an  envelope  properly  addressed,  and  place  in  Vouchers  for  Others. 

As  the  consignment  is  now  closed,  and  you  have  sent  the  net  proceeds  to  the  consignor, 

it  is  evident  that  there  is  no  necessity  for  any  record  of  this  lot  in  your  books.     If  j'our 

school  is  not  provided  with  the  proper  letter  press,  then  the  entrj^  in  the  account  sales 

register  will  be  a  sufficient  record  of  the  transaction. 

Some  business  houses  have  the  draft  made  payable  to  the  order  of  the  person  to  whom  it  is  sent,  but 
it  is  better  to  make  the  draft  paj-able  to  your  own  order  and  indorse  it  over  to  the  person  to  whom  it  is 
to  be  sent,  as  his  indorsement  will  then  be  necessary  before  he  can  get  the  cash  on  the  draft,  and  the 
indorsement  is  a  receipt  for  the  money. 

No.  22. — Render  an  account  sales  of  lot  R-i  received  from  Rice  &  Pond. 

Fill  out  the  loose  sheet  in  the  consignment  ledger  as  in  No.  21,  and  write  a  check  for 
the  amount  of  the  net  proceeds.  Take  a  copy  of  the  loose  sheet  in  your  letter  impression 
book,  and  enclose  with  the  check  in  an  envelope,  which  address  to  Rice  &  Pond,  and  place 
in  Vouchers  for  Others.      (Enter  in  cash  book  and  account  sales  register.) 


152 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Sale  of  merchandise  for  acco 


UNT   OF         ^      y/Y^. 


'K^ 


^==^k- 


y^-/ 


(Your  state.) 


«^  E.  H.  Reed  &  Company, 


invoice  No.  _ 


_z. 


COMMISSION    MERCHANTS, 


(Your  place  here.) 


iNVOict  D*Te        ^^^-f:^^^-/^^-^  "^ ^,  '°° 


(Write  jroar  own  name  here.) 


/6> 


/C 


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C-3 


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z 


RECEIVED.  /^— ^S^:'«:^7^-:?C?^^:-ZS!^-^^  /  ^ ,'<-<£-d^,  0 i^-^i^-,^^ 


FREIGHT.  CARTAGE,   ETC. 


ADVANCES. 


3 


-/ 


/li-J-^  ■^.^tl<L^,  (2?^^^ 


0a- 


/a.<^ 


COMMISSION.         \J~  Va 
CHARGES.  /  /* 


NET  PROCEEDS, 


^ 


/  3 


Zti  ^ 


2-^P 


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No.  23. — This  memorandum  accompanies  another  shipment  received  from  E.  Mason 
&Co. 

Enter  as  before  on  a  loose  sheet,  and  place  in  your  consignment  ledger.  The  stencil 
will  be  M-2. 

No.  24. — This  memorandum  comes  w^ith  another  lot  of  goods  consigned  to  3'ou  by 
Rice  &  Pond.     The  stencil  will  be  R-2.      (Enter  on  a  loose  sheet  as  usual.) 

No.  25. — This  letter  comes  with  goods  from  Chas.  Hunter  &  Co.  (Enter  on  a  loose 
sheet  consignment  as  in  No.  23.) 

No.  2<>.— Fill  this  order,  taking  3X  flour,  $5.25,  and  Pastry  flour,  $5.50,  from  your 
own  merchandise;  C.  E.  peas,  $1.30;  E.  J.  peas,  $1.50;  beans,  $1.20,  from  lot  W-i. 
Draw  a  draft  at  60  days  from  the  date  of  the  bill  and  present  it  to  your  teacher  for  accept- 
ance. He  will  accept  the  draft  for  D.  W.  Perry  &  Co.  Make  the  proper  journal  entry, 
and  place  the  acceptance  in  the  Cash  Drawer. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  153 

No.  27. — Take  order  No.  19,  A.  W.  Noone  &  Co.,  from  your  Voucher  File  and  make 
a  bill  of  the  goods  called  for,  taking  20  brls.  Redcloud  at  $4.75  per  brl.  and  20  brls.  Snow- 
flake  at  $4.90  per  brl.  from  Fischer  Flour  Go's,  consignment  No.  i,  and  10  brls.  apples  at 
fo-75  per  brl.  from  E.  Mason  &  Go's,  consignment  No.  2. 

No.  28. — Sales  from  blotter.  Enter  in  your  sales  book,  and  carry  such  items  to 
the  loose  sheets  in  the  consignment  ledger  as  belong  to  the  consignment  sales. 

No.  29. — Gashier's  payments.  Make  out  checks  for  the  amounts  required,  and  enter 
in  your  cash  book.  Garry  all  consignment  sales  from  the  sales  book  to  the  consignment 
ledger,  and  all  consignment  items  from  the  credit  side  of  the  cash  book  to  the  consignment 
ledger. 

No.  30. — July  19.  Render  an  account  sales  of  lot  W-i,  and  place  the  net  proceeds 
to  the  credit  of  the  Western  New  York  Preserving  Gompany  subject  to  sight  draft.  In 
this  case  no  check  has  been  sent  for  the  net  proceeds,  but  an  account  will  be  opened  with 
the  Western  New  York  Preserving  Gompany  in  your  main  ledger.  Write  Placed  to  credit 
opposite  Net  Proceeds  on  the  loose  sheet.  Remove  the  loose  sheet,  take  a  copy,  and  send 
it  as  usual  to  the  consignor.  Enter  in  your  account  sales  register  as  usual.  The  net 
proceeds  should  be  posted  to  the  ledger  from  the  account  sales  register.  Place  in 
Voucher  for  Others. 

No.  31. — This  check  is  received  from  the  Public  Market  Go.,  to  pay  the  balance  due 
to  the  first  of  July,  $244.60. 

No.  32. — This  check  is  received  from  G.  H.  Tucker  &  Go.,  to  pay  the  balance  due 

to  the  first  of  July,  $204.13. 

It  is  not  necessary  to  send  a  receipt  for  a  check,  since  the  check  itself  when  paid  by  the  bank  will  be 
canceled  and  returned  to  its  maker,  and  thus  show  that  the  amount  has  been  paid  to  the  person  in  whose 
favor  it  was  made;  but  it  is  customary  in  most  business  houses  to  acknowledge  the  receipt  of  a  check  by 
a  letter  similar  to  the  one  given  as  a  model  on  page  81. 

No.  33. — The  Traders  Bank  presents  Ghas.  Hunter  &  Go's,  draft  at  sight.  Accept 
it  by  writing  Accepted,  July  ip,  payable  at  Traders  Bank  across  the  face,  and  give  the 
draft  to  the  Traders  Bank,  asking  them  to  charge  to  your  account.  The  bank  will  deduct 
the  amount  of  the  draft  from  your  balance  on  deposit,  and  the  draft  will  come  back  to 
you  with  your  own  vouchers  when  your  bank  pass  book  is  written  up.  Do  not  fail 
to  deduct  the  amoinit  of  this  draft  from  your  balance  in  the  bank,  as  shown  on  the  stub 
of  your  check  book,  and  enter  in  the  cash  book,  debiting  Consignme^its ,  since  it  is  paid  on 
Hunter's  consignment  No.  i. 

No.  34. — Sales  for  the  day  as  per  blotter.      (Enter  in  sales  book  and  cash  book.) 

No.  35. — Gashier's  payment  for  the  day.  (Write  the  check  and  enter  in  your  cash 
book.) 

No.  36. — This  invoice  has  been  received  for  your  order  given  to  the  salesman  of  the 
house,  who  has  recently  called  upon  you. 

Garry  all  sales  from  consignments  to  the  consignment  ledger,  and  see  that  cash  paid 
for  consignments  is  placed  in  the  debit  column  of  the  consignment  for  w^hich  it  was  paid. 

No.  37.— July  20.  Ship  to  J.  M.  Marsh  &  Go.,  Boston,  Mass.,  to  be  sold  on  com- 
mission, 25  bxs.  cheese,  2625  lbs.,  at  12^';  25  tubs  butter,  1500  lbs.,  at  2\i\  Pay  insur- 
ance, $1.50,  in  cash.     (Enter  in  shipment  ledger  and  cash  book.) 


154  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

Xo.  38. — Ship  looo  bu.  potatoes  at  62 ><',•,  and  pay  for  insurance,  Si. 25.  (Enter  in 
shipment  ledger  and  cash  book. ) 

•  No.  39. — Draw  at  30  daj^s,  on  J.  M.  Marsh  &  Co.,  for  $300,  and  place  the  draft  in 
Traders  Bank  for  collection.  Make  journal  entrj^,  crediting  Shipments  and  debiting 
Bills  Receivable ,  since  it  is  understood  that  Marsh  &  Co.  will  accept  the  draft;  also  credit 
Shipment  to  J.  M.  Marsh  &  Co.  in  shipment  ledger  for  $300.  Make  no  entry  on  the  stub 
of  the  check  book.  An  entry  will  be  made  in  your  bank  pass  book  by  the  teller  at  the 
bank  when  the  draft  is  collected,  and  you  will  then  enter  it  on  the  stub  of  the  check  book. 

No.  40. — This  memorandum  of  advice  accompanies  a  lot  of  goods  received  from  the 
Iowa  Packing  Co.,  to  be  sold  on  their  account  and  risk.  (Enter  the  goods  on  a  loose 
sheet,  and  paste  the  sheet  in  the  consignment  ledger.) 

No.  41. — Fill  this  order  from  Fischer  Flour  Co's.  consignment — Redcloud,  $4.75; 
Snowflake,  $4.90.      (Enter  in  the  sales  book  and  in  the  loose  leaf  consignment  ledger.) 

No.  42. — Sales  from  blotter.    (Enter  in  sales  book,  cash  book,  and  consignment  ledger. ) 

No.  43. — Render  an  account  sales  of  the  Fischer  Flour  Co's.  consignment,  and  send 
them  a  check  for  the  net  proceeds,  less  draft  for  $300  accepted  Jul}^  17th. 

No.  44. — This  invoice  is  received  for  goods  ordered  by  you  on  the  17th. 

No.  45. — This  invoice  is  received  from  Russell  &  Birkett. 

No.  4G. — Cashier's  payments.     (Enter  in  the  proper  columns  of  the  cash  book.) 

No.  47. — This  check  is  received  from  the  City  Hotel  Co.,  for  the  amount  due  July 
ist,  less  ^.  (Enter  in  the  cash  book,  placing  only  the  net  cash  received  in  the  General 
column  and  the  discount  in  the  Merchandise  Discount  column.) 

No.  48. —  Deposit  all  cash  and  checks  on  hand. 

Post  all  books  and  take  a  trial  balance.  Write  the  pages  first  in  the  ledger  index,  and 
then  open  the  accounts  in  your  main  ledger,  as  follows,  treating  the  first  blank  page  as 
page  I :  Page  i ,  E.  H.  Reed,  Student,  Merchandise,  each  one-third  page.  Page  2,  Expense, 
Furniture  and  Fixtures,  Real  Estate,  Commission,  each  one-fourth  page.  Page  3,  Charges, 
Horse  and  Wagon,  Office  Supplies,  Merchandise  Discount,  each  one-fourth  page.  Page  4, 
Shipments,  Discount,  Freight,  each  one-third  page.  Page  5,  lyoss  and  Gain,  one-half 
page.  Page  6,  Theodore  Crosby  &  Co.,  A.  W.  Noone  &  Co.,  Public  Market  Co.,  Geo. 
H.  Tucker  &  Co.,  each  one-fourth  page.  Page  7,  City  Hotel  Co.,  Thomas  Varick  &  Co., 
E.  B.  Dean  &  Co.,  National  Market  Co.,  each  one-fourth  page.  Page  8,  D.  W.  Perry  & 
Co.,  J.  M.  Marsh  &  Co.,  Bills  Receivable,  Consignments,  each  one-fourth  page.  Page 
10,  Russell  &  Birkett,  Curtice,  Olney  &  Co.,  Lutz  Bros.,  Gillette  &  Hennigan,  each  one- 
fourth  page.  Page  11,  Dock  &  Coal  Co.,  Western  New  York  Preserving  Co.,  Chas. 
Hunter  &  Co.,  Bills  Payable,  each  one-fourth  page. 

INSTRUCTIONS   FOR    POSTING. 

In  this  month's  business  the  posting  is  somewhat  more  complicated  than  in  the  jirevious 
work,  and  it  is  well  to  get  a  clear  idea  of  the  books  from  which  the  entries  in  the  main 
ledger  are  taken,  and  the  manner  in  which  they  are  posted.  The  main  ledger  should  be 
divided  into  sections,  as  in  the  previous  month's  work,  the  first  containing  the  partners' 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


155 


accounts  and  all  accounts  showing  losses  or  gains,  including  an  account  with  shipments 
and  the  Loss  and  Gain  account.  The  account  with  shipments  is  really  an  abstract  of  the 
shipment  ledger  and  the  Shipments  column  in  the  cash  book,  with  perhaps  an  occasional 
entry  from  the  journal,  in  cases  where  the  net  proceeds  of  the  shipment  have  been  placed 
to  your  credit  instead  of  remitted  in  cash.  The  second  section,  called  the  customers' 
ledger,  should  contain  all  accounts  which  are  resources  to  the  business,  and  an  account 
with  consignments,  which  is  an  abstract  of  the  account  sales  register  and  the  Consign- 
ments columns  of  the  cash  book  and  the  sales  book.  The  third  section  should  contain 
all  accounts  which  are  liabilities  to  the  business. 

The  items  from  the  Consignments  columns  of  the  cash  book  and  the  sales  book  should 
be  carried  to  the  loose  sheets  in  the  consignment  ledger  at  the  close  of  each  day,  as  it  is 
necessary  that  they  appear  there  before  an  account  sales  can  be  rendered  to  the  consignor, 
and  it  is  also  necessary  that  the  items  in  the  Shipments  columns  of  the  cash  book  be 
carried  to  the  shipment  ledger  in  the  same  manner,  as  they  must  appear  there  before  the 
final  closing  of  the  shipment  ledger  or  the  balancing  of  the  cash  book.  When  the  amounts 
from  the  Shipments  columns  of  the  cash  book  are  carried  to  the  shipment  ledger,  each  ship- 
ment should  be  closed  by  writing  Loss  or  Gai7i  on  the  smaller  side  of  the  shipment 
ledger  (see  model,  page  138). 

Post  your  journal  as  usual. 

POSTING  THE   CASH    BOOK. 

Debit  Side  of  Cash  Book. — Post  the  General  column  of  the  cash  book  on  the  debit 
side  as  in  previous  cash  books,  except  that  cash  sales  of  merchandise  which  are  charged 
to  individuals  are  not  posted,  but  checked  off  both  in  the  cash  book  and  the  sales  book 
(see  model,  page  136). 

Post  the  footing  of  the  Merchandise  Discount  column  to  the  debit  of  Merchandise 
Discount  in  the  main  ledger.  Do  not  forget  to  credit  each  personal  account  with  mer- 
chandise discount,  as  well  as  with  the  net  amount  of  cash  received  Tsee  model  following). 

W.  B.  Andrews. 


Balance 

250 

Jan. 

7 

C 

2 

237 

50 

1 

7 

C 

2 

12 

50 

Jan. 


Post  the  footing  of  the  Shipments  column  to  the  credit  of  Shipments  in  the  main  ledger. 

Credit  Side  of  Cash  Book. — Post  the  General  column  as  in  previous  work. 

Post  Merchandise  Discount  to  the  credit  of  Merchandise  Discount  in  the  main  ledger. 
Do  not  forget  to  debit  each  personal  account  with  the  merchandise  discount,  as  well  as 
with  the  net  amount  of  cash  paid  out  (see  model  following). 

H.  F.  Wood  &  Bros. 


Jan.    9    C 
9    C 


3 
3 


570 
30 


Jan.     3     S.  B. 


600 


Post  the  footing  of  the  Shipments  column  to  the  debit  of  Shipments  in  the  main  ledger. 
Post  the  footing  of  Consignments  column  to  the  debit  of  Consignments  in  the  main 
ledger.    Balance  the  cash  book  (see  model  pages  136  and  137). 


156  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

POSTING   THE    SALES  BOOK. 

Post  as  in  previous  work  to  the  debit  side  of  personal  accounts  in  the  ledger,  except 
that  cash  sales  should  not  be  posted  to  the  debit  of  persons  to  whom  they  are  made,  but 
checked  off  as  in  the  cash  book  (see  model,  page  139). 

Post  the  footing  of  Sales  from  Consignments  column  to  the  credit  of  Consignments  in 
the  main  ledger. 

Post  the  footing  of  the  Merchandise  column  to  the  credit  of  Merchandise  in  the  main 
ledger. 

POSTING   THE    SHIPMENT   LEDGER. 

Post  the  footing  of  the  Merchandise  column  in  the  shipment  ledger  to  the  debit  of 
Shipments  and  to  the  credit  of  Merchandise  in  the  main  ledger  (see  model,  page  138). 

POSTING   THE   ACCOUNT   SALES    REGISTER. 

Carry  the  footings  of  Commission  and  Charges  columns  into  the  Amount  Charged  to 
Account  column,  and  opposite  these  amounts  write  Comniissio7i  and  Charges  in  the  Name 
of  Account  column.     (See  model,  pages  140  and  141.) 

Post  to  the  main  ledger  any  amounts  which  may  be  in  the  Amount  Charged  to  Account 
column  to  the  credit  of  the  names  indicated  in  the  Name  of  Account  column  of  the  account 
sales  register,  and  the  total  of  this  column  to  the  debit  of  Consignments.  (See  model, 
pages  140  and  141.) 

Post  the  invoice  book  as  usual. 

Your  posting  is  now  completed,  but  you  should  check  back,  to  be  certain  that  there 
are  no  omissions. 

Study  carefully  these  directions  for  posting,  and  you  will  have  no  trouble  in  taking 
your  trial  balance. 

No.  4t>. — July  23.  This  check  has  been  received  in  payment  of  bill  of  July  i6th, 
less  yi  on  the  part  of  the  sale  which  was  made  from  your  own  merchandise.  See  if  the 
check  is  for  the  correct  amount,  and  if  so,  enter  it  in  j^our  cash  book,  del:)iting  Merchan- 
dise Discount  for  the  amount  of  the  difference  between  the  check  and  the  amotint  of  the 
bill  shown  in  your  sales  book  under  date  of  July  i6th. 

No.  50. — This  check  is  in  payment  of  bill  of  the  17th,  less  y'c  on  that  part  which  was 
taken  from  your  own  merchandise.      (Enter  as  in  No.  49.) 

No.  51. — This  bill  of  lading  of  flour  shipped  you  by  the  Fischer  Flour  Co.,  to  be 
sold  on  their  accoinit  and  risk,  together  with  the  accompanying  sight  draft  for  $500 
are  presented  by  your  bank.  Accept  the  sight  draft  by  writing  across  the  face  Accepted, 
payable  at  Traders  Bank.  This  is  in  effect  instructing  the  bank  to  charge  to  your 
account,  and  of  course  you  must  deduct  this  $500  from  the  bank  balance  on  the  stub  of 
your  check  book  (see  No.  33) ;  enter  also  in  your  cash  book,  debiting  Consignmoils,  Fischer 
No.  2.  E^ntcr  the  goods  on  a  loose  sheet  in  the  consignment  ledger,  w  illi  lln.'  stencil  mark 
F-2,  and  opposite  Adva7iccs,  in  the  debit  coltinni,  write  the  amount  of  the  sight  draft  you 
have  ordered  to  be  paid. 

No.  51i. — This  memorandiun  comes  with  goods  received  to  be  sold  on  accoiuit  of  Rice 
&  Pond.     (Enter  the  goods  on  a  loose  shctt  in  the  consignment  ledger.) 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  157 

No.  5.*?. — Render  an  account  sales  to  Rice  &  Pond  for  consignment  No.  2,  which  is 
sold  out,  and  send  them  a  check  for  the  net  proceeds. 

Close  the  consignment  in  your  consignment  ledger,  and  remove  the  sheet  from  the 
book.  Enclose  the  check  with  it,  and  place  both  in  Vouchers  for  Others.  Make  the  proper 
entry  for  the  check  in  your  cash  book.  In  what  column  should  the  amount  be  placed? 
Make  entry  in  the  account  sales  register. 

No.  54:. — This  draft  is  presented  to  you  by  the  bank  for  payment.  Write  Accepted, 
payable  at  Traders  Bank  across  the  face,  as  in  No.  51,  and  place  it  in  Cash  Paid 
Out,  or  give  it  to  the  bank  teller  or  to  the  person  appointed  to  take  charge  of  such  paper. 
(Enter  in  your  cash  book,  debiting  Westerji  New  York  Preserving  Co.) 

No.  55. — Fill  this  order,  taking  apples,  $3.75  per  brl.,  butter,  24^  per  lb.  from  Mason's 
consignment  No.  2,  and  XXX  flour,  $5.25  per  brl.,  XX  flour,  $5.00  per  brl.,  Pastry  flour, 
$5.50  per  brl.,  from  your  own  merchandise.  Do  not  fail  to  write  the  stencil  number  of 
the  consignment  opposite  the  items  in  the  sales  book  that  are  taken  from  Mason's  consign- 
ment, and  enter  these  amounts  on  the  credit  side  of  the  loose  sheet  in  the  consignment 
ledger. 

No.  56. — These  sales  are  taken  from  the  blotter  of  the  day.  Enter  in  your  sales 
book  as  usual,  and  be  sure  that  you  place  the  stencil  mark  opposite  each  sale  made  from 
a  consignment. 

No.  57. — Cashier's  payments  for  the  day.  Make  out  these  checks  as  usual,  and 
enter  in  your  cash  book.     Be  careful  in  calculating  your  discounts. 

No.  58. — July  24.     This  invoice  has  been  received  from  the  Dock  &  Coal  Co. 

No.  59. — This  check  has  been  received  from  L,arkin  &  Co.  with  an  account  sales  of 
shipment  sent  them  the  17th.  Enter  in  your  cash  book,  placing  the  amount  in  the  Ship- 
ments column;  also  enter  in  shipment  ledger  in  credit  column  (see  model,  page  138). 
Close  this  shipment. 

No.  60.  This  check  is  received  in  payment  of  bills  of  July  17th  and  i8th,  less  3'f  on 
the  part  of  the  bills  which  have  been  sold  from  your  own  merchandise.  See  that  the 
discount  is  correctly  calculated.     Enter  in  your  cash  book  as  usual.     (See  No.  49.) 

No.  61. — Take  from  your  Cash  Drawer  draft  on  D.  W.  Perry  &  Co.,  at  sixty  days  from 
July  1 8th,  for  the  amount  of  their  bill  of  that  date,  $220.25,  and  have  it  discounted  at  the 
bank.  (Prepare  discount  slip  as  usual.)  Notice  that  the  draft  is  not  discounted  for  60 
days,  but  for  the  time  it  has  to  run.  See  when  it  is  due;  then  calculate  the  discount 
upon  it  for  the  time  between  July  24th,  the  present  date,  and  the  date  upon  which  it 
falls  due.  See  that  the  net  proceeds  are  placed  to  your  credit  in  your  bank  pass  book, 
and  enter  in  your  cash  book  and  on  your  check  book  stub  the  same  as  a  deposit.  What 
account  should  be  credited?     What  account  should  be  debited? 

No.  62. — ThiS  memorandum  comes  with  goods  received,  freight  paid,  from  the  West- 
em  New  York  Preserving  Company.  (Enter  on  loose  sheet  of  consignment  ledger  as 
usual.) 

No.  63. — Render  an  account  sales  of  consignment  received  from  the  low^a  Packing 
Company.    Their  net  proceeds  should  be  $136.48.    Send  them  this  amount  by  New  York 


158  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

draft,  for  which  3'ou  will  pay  25^/.  Make  the  check  for  $136.73,  amount  of  draft  and 
exchange,  and  buy  the  draft  at  the  bank,  giving  the  check  in  exchange  for  it.  Have 
the  draft  made  to  your  own  order,  indorse  properly,  and  enclose  it  with  the  account  sales  in 
an  envelope  addressed  to  the  Iowa  Packing  Company.  Make  the  proper  entries  in  your 
cash  book  and  account  sales  register  (see  No.  21). 

No.  04. — These  sales  have  been  made  from  the  blotter.  Enter  in  the  sales  book  and 
the  cash  book  as  usual,  and  carry  to  the  consignments  sheets  in  the  consignment  ledger. 

No.  <>."». — Ship  to  Warren  Jordan,  New  York,  to  be  sold  on  commission,  150  brls. 
apples  at  $2.75,  800  bu.  potatoes  at  ^y/-.     (Enter  in  your  shipment  ledger.) 

No.  66. — Cashier's  payments  for  the  day.  Make  out  checks  and  enter  properly  in  the 
cash  book  and  on  the  check  book  stub. 

No.  67. — July  25.  This  bill  of  lading  and  the  accompanying  sight  draft  are  pre- 
sented by  the  Traders  Bank,  and  the  goods  mentioned  have  been  received  from  the  Iowa 
Packing  Co.,  to  be  sold  on  their  account  and  risk. 

Accept  the  draft,  payable  at  the  bank,  and  place  it  in  Cash  Paid  Out,  or  hand  it  to 
the  teller  if  there  is  one.  Deduct  the  amount  from  your  balance  on  the  stub  of  3'our 
check  book.  Enter  in  your  cash  book,  and  make  a  record  of  the  receipt  of  the  goods  on 
a  consignment  sheet  in  the  consignment  ledger. 

No.  68. — Enter  this  lot  received  from  E.  Mason  &  Co.  on  a  loose  sheet  of  the 
consignment  ledger.      (M-3.) 

No.  69. — Send  500  bu.  potatoes  at  55^/,  and  10  tubs  butter  at  21^/,  to  F.  H.  I^arkin  & 
Co.,  Northboro,  to  be  sold  on  commission.  Take  these  goods  from  your  own  merchan- 
dise.    (Enter  in  your  shipment  ledger.) 

No.  70. — Render  an  account  sales  of  E.  Mason  &  Co's.  consignment  No.  2,  and  send 
them  the  net  proceeds  by  New  York  draft.  Make  out  a  check  for  the  amount  of  the 
draft  and  50^/  exchange.  Givi  the  check  to  the  bank  teller,  or  person  appointed  to  take 
charge  of  such  paper,  receive  the  draft,  which  should  be  for  $465.47,  and  indorse  it 
to  the  order  of  E.  Mason  &  Co.  Enter  in  your  cash  book  and  account  sales  register 
(see  No.  21). 

This  check  is  for  a  larger  amount  than  you  have  on  deposit  in  the  bank  at  this  time. 
"When  you  present  the  check  in  exchange  for  the  draft  to  be  sent  to  E.  Mason  &  Co.,  tell 
your  teacher,  or  the  cashier  of  the  bank,  that  this  overdraws  your  account,  but  that  dur- 
ing the  day  you  will  make  a  deposit  of  checks,  etc.,  sufficient  to  make  up  the  deficiency. 
Deduct  the  balance  you  have  on  hand  from  the  amount  of  the  check,  and  write  the 
remainder,  in  red  ink,  on  the  stub  of  your  check  book,  with  the  explanation,  Overdraft. 

It  is  customary  for  ]janks  to  allow  an  occasional  overdraft  from  customers  in  good  standing,  and 
such  overdrafts  will  sometimes  occur  through  mistakes  arising  from  the  failure  to  deiluct  a  check  from 
the  balance  .shown  on  the  stub  of  the  cheek  book.  In  such  cases  the  bank  generallv  notifies  tlie  drawer 
of  the  check  that  he  has  overdrawn  his  account,  and  requests  him  to  make  up  the  defieienc\-. 

No.  71. — Order  received  from  D.  \V.  Perry  &  Co.  Fill  order  as  usual,  taking  apj)les 
at  $3.50  and  butter  at  22^/'  from  H-i;  plimis  at  $1.50  and  peaches  at  $1.75  from  \V-2. 

No.  72. — Sales  from  blotter.  Ivnter  in  your  sales  hook,  and  carry  to  the  consiginnent 
sheets.  Place  the  cash  in  your  Cash  Drawer.  Check  off  cash  .sales  in  the  sales  book  and 
in  the  cash  book. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  159 

No.  73. — Cashier's  payments  for  the  day.  Make  out  a  check  for  the  bill  for  build- 
ing stable,  and  pay  the  freight  bills  in  cash.  Do  not  forget  to  charge  each  consign- 
ment and  each  shipment  with  its  freight  bill. 

This  check  is  also  an  overdraft,  and,  like  the  amount  sent  to  E.  Mason  &  Co.,  it  will 
be  made  up  in  the  day's  deposits.  Add  $350  on  the  stub  of  the  check  book  to  the  red 
ink  overdraft,  and  write  the  result  underneath,  in  red  ink,  with  the  explanation.  Over- 
draft. When  you  make  your  deposit  at  the  close  of  the  day,  deduct  this  red  ink  amount 
of  overdraft  from  your  deposit  for  the  day  on  the  stub  of  your  check  book,  and  write  the 
difference  underneath,  in  black  ink,  with  the  explanation.  Balance. 

No.  74. — Deposit  checks  of  National  Market  Co.,  Public  Market  Co.,  Thos.  Varick 
&  Co.,  F.  H.  I^arkin  &  Co.  and  F.  H.  Randall  &  Co. 

No.   75. — July  26.     This  invoice  has  been  purchased  from  Gillette  &  Hennigan. 

No.  7(>. — Fill  order,  taking  oranges  at  $6.00,  lemons  at  $4.75  and  pineapples  at  $1.80 
from  your  own  merchandise;  plums  at  $1.50  and  cherries  at  $1.50  from  W-2. 

No.  7  7. — This  order  is  received  from  G.  H.  Tucker  &  Co.,  and,  as  per  letter,  you  ma}-' 
draw  a  sight  draft  for  the  amount  of  the  bill.  Fill  the  order,  taking  goods  from  your  own 
merchandise  —  pineapples,  $1.80;  lemons,  $4.75;  cheese,  15^/;  ketchup,  $2.50. 

Make  out  the  invoice,  and  deduct  the  discount  at  3^,  since  the  sale  is  in  effect  for 
cash.  Draw  the  draft  and  place  it  in  your  Cash  Drawer  for  deposit  at  the  close  of  the 
day  with  other  drafts  and  checks  received.  Enter  the  amount  in  your  cash  book  the  same 
as  if  it  were  a  check,  and  check  off  the  sales  book  and  the  cash  book  entries  the  same  as 
in  regular  cash  sales. 

No.  78. — These  are  sundry  small  sales  made  from  your  own  merchandise  and  not 
entered  in  the  sales  book,  but  charged  direct  to  the  credit  of  Merchandise  from  the  cash  book. 

No.  71). — This  is  a  letter  from  Russell  &  Birkett,  enclosing  a  draft.  Accept  this 
draft  and  place  it  in  Vouchers  for  Others.      Enter  in  your  journal. 

No.  80. — This  check  is  in  payment  of  bills  of  July  i6th  and  17th.     The  bills  are  net. 

No.  81. — Cashier's  payment.  Pay  freight  on  Gillette  &  Hennigan's  invoice  in  cash, 
$5.60. 

No.  82,— Deposit  sight  draft  of  G.  H.  Tucker  &  Co.  and  check  of  City  Hotel  Co, 
Enter  the  sight  draft  on  your  deposit  ticket  imder  Checks,  with  the  explanation.  Sight 
draft,  opposite  the  amount.  It  will  be  received  by  the  bank  the  same  as  a  check,  if  the 
depositor  is  a  responsible  person. 

No.  83. — July  27.  Return  10  tubs  of  butter  received  from  Chas.  Hunter  &  Co.,  as 
it  is  found  upon  examination  to  be  unfit  for  your  trade. 

This  transaction  calls  for  an  entry  in  your  consignment  ledger.  Under  Sales  write  10 
tubs  butter  returned,  600  lbs.  Write  a  letter  to  Hunter  &  Co.,  telling  them  w^hy  the  goods 
have  been  returned. 

No.  84. — Render  an  account  sales  to  Rice  &  Pond  for  consignment  No,  3.  Send  them 
a  check  for  the  net  proceeds.      Do  not  fail  to  enter  in  account  sales  register. 


160 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Statement  of  Losses  and 


Expense 

Real  Estate 

Furniture  and  Fixtures 

Horses  and  Wagon 

Office  Supplies 

Freight 

Discount 

Gain  from  the  business* 

Interest  due  Geo.  Ward,  partner 

"    A.  H.  Gray,       " 
Geo.  Ward,  Yz  net  gain* 
A.  H.  Gray,  Yz  net  gain* 

cost 

insurance  unexpired 

cost 

valued  at 

cost 

valued  at 

cost 

valued  at 

cost 

valued  at 

cost 

excess  of  debits 

no 
45 

68 

1 

64 

150 

25 

25 

5 
115 

2 
469 

32 

7200 
7050 

200 
175 

275 
250 

35 
30 

30 
40 

52 

856 

54 

13 
12 

26 
71 
78 
77 

25 
443 

97 

221 
221 

55 

469 

52 

*To  be  entered  in  red  ink. 


No.  85. — Sales  from  blotter.  (Enter  in  your  sales  book,  consignment  ledger  and 
cash  book.) 

No.  8G. — Cashier's  payments.  Pay  these  amounts  in  currency,  and  enter  as  Expense 
and  Office  Supplies  in  your  cash  book. 

No.  87. — This  check  is  for  A.  W.  Noone  &  Go's,  account,  item  of  the  iSth  inst. 
See  that  the  amount  is  correct. 

No.  88. — This  check  is  from  E.  B.  Dean  &  Co.,  in  payment  of  bill  of  the  17th,  less 
3^  discount  on  that  part  of  the  bill  taken  from  your  own  goods.  See  that  the  discount 
is  properly  calculated  and  deducted,  and  enter  in  your  cash  book  (see  No.  49). 

No.  89. — Render  an  account  sales  to  Chas.  Hunter  &  Co.,  and  place  the  net  proceeds 
to  their  credit  (see  No.  30).  Enter  in  Packages  Returned  column  of  the  account  sales 
register  the  10  tubs  butter  returned  July  27th. 

No.  DO. — Received  account  sales  of  shipment  to  J.  M.  Marsh  «&  Co.;  net  proceeds 
have  been  placed  to  your  credit  subject  to  sight  draft.  Enter  in  your  journal,  debiting 
/.  M.  Marsh  &  Co.  and  crediting  Shipments.  Enter  in  the  shipment  ledger,  as  usual,  in 
the  credit  of  the  ledger  columns.     Close  the  shipment. 

•No.  1)1. — Received  an  account  sales  from  W.  A.  Simonds  &  Co.,  New  York,  with 
N.  Y.  draft  for  your  net  proceeds.  Enter  in  the  cash  book  as  usual,  and  also  in  the  credit 
column  of  the  shipment  ledger.     Close  the  shipment. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


161 


Gains,  July  31,   190-. 


— 

Shipments 

Merchandise 

Mdse.  Discount 

Commission 

Charges 

Gain  from  the  business  brought 

received  from  sales 
value  of  unsold 

cost 

sales 

value  of  unsold 

cost 

excess  of  credits 

down 

2800 
1445 

75 

130 

364 
215 
122 

23 

4245 
4115 

75 

41 
27 

38 
65 
30 

33 

4461 
2747 

7208 
6844 

35 

68 
47 
71 

856 

54 

469 

52 

469 

52 

No.  92. — Your  acceptance  of  July  17th,  favor  Fischer  Flour  Co.,  is  due  this  day  at 
Traders  Bank.     Deduct  the  amount  from  your  balance,  and  enter  in  the  cash  book. 

No.  93. — Deposit  all  cash,  checks  and  N.  Y.  drafts. 

Post  all  your  work,  being  sure  to  check  back  before  you  take  a  trial  balance.  Note 
carefully  the  following: 

First. — That  you  have  posted  your  journal  correctly. 

Second. — That  you  have  posted  the  footings  of  Shipments,  Consignments  and  Mer- 
chandise Discount  columns  in  your  cash  book  to  the  Shipments,  Consignments  and 
Merchandise  Discount  accounts  in  the  main  ledger. 

Third. — That  you  have  posted  the  footings  of  the  Merchandise  and  Consignments 
columns  in  your  sales  book  to  Merchandise  and  Consignments  accounts  in  your  main  ledger. 

Fourth. — That  you  have  posted  the  footing  of  Merchandise  column  in  your  shipment 
ledger  to  the  credit  of  Merchandise  and  to  the  debit  of  Shipments  accounts  in  your  main 
ledger. 

Fifth. — That  you  have  posted  the  footings  of  Commission  and  Charges  columns  in 
your  account  sales  register  to  the  debit  of  Consignments  and  to  the  credit  of  Commission 
and  Charges  accounts  in  your  main  ledger,  and  all  amounts  which  may  appear  in  the 
Charged  to  Account  column  of  that  book  to  the  credit  of  the  persons  or  firms  to  whom 
accounts  sales  have  been  rendered,  and  the  total  to  the  debit  of  Consignments. 

Sixth. — That  you  have  credited  each  account  in  the  main  ledger  from  the  invoice 
book  with  the  amount  of  each  invoice,  and  debited  Merchandise  account  for  the  total. 

Com. — II 


162 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Statement  of  Resources  and 


Real  Estate 

Expense 

Ofl&ce  Supplies 

Horses  and  Wagon 

Shipments 

Merchandise 

Furniture  and  Fixtures 

Cash 

Bills  Receivable 

Accts.  Receivable 

Consignments 

Geo.  Ward 


A.  H.  Gray 


valued  at 

insurance  unexpired 
valued  at 


in  bank 
notes  on  hand 
personal  debit  balances 
advances  made  in  excess  of  sales 


net  investment 
interest 
Yz  net  gain 
present  worth 
net  investment 
interest 
Yz  net  gain 
present  worth 


2652.00 
13.26 


2542.00 
12.71 


7050 

45 

68 

30 

250 

1445 

75 

2747 

38 

200 

1795 

60 

375 

3421 

48 

520 

— 

17880 

2665 

26 

221 

.7§. 

2887 

2554 

71 

221 

77 

2776 

5663 

— 

89 


04 


48 

52 


Shipments  Account  in  the  Ledscr. — This  account  is  closed  like  all  the  business 
accounts,  by  writing  Gain  or  Loss  on  the  smaller  side  of  the  account,  but  it  is  ahva3'S 
necessary  to  find  from  the  shipment  ledger  what  goods  are  as  yet  unsold.  Enter  the 
value  of  these  shipments  on  the  credit  side  of  Shipments  account  as  an  inventory.  The 
gain  or  loss  shown  when  the  Shipments  account  is  closed  should  be  the  same  as  the  differ- 
ence between  the  gains  and  losses  from  the  shipments,  less  charges  on  unsold  goods,  as 
shown  in  the  shipment  ledger,  where  each  shipment  is  balanced  by  writing  Gain  or  Loss 
on  the  smaller  side  in  the  ledger  columns  of  that  book.  As  made  up  from  the  postings, 
the  Shipments  account  in  the  ledger  should  contain  on  the  debit  or  left-hand  side: 
(a)  the  footing  of  Merchandise  column  from  the  shipment  ledger;  (b)  the  footing  of 
the  Shipments  column  from  the  credit  side  of  the  cash  book.  On  the  credit  side  should 
be  found:  (a)  the  footing  of  the  Shipments  column  from  the  debit  side  of  the  cash 
book;  (b)  any  amounts  from  consignees  who  have  rendered  you  accounts  sales,  but  have 
not  sent  remittances.  These  amounts  will  be  found  in  the  journal,  where  the  entries 
have  been  made  covering  such  transactions. 

€oiisi<;-nnients  Account  in  the  Lodj-er. — Consignments  account  in  the  ledger  is  an 
account  which,  when  all  consignments  are  disposed  of  and  accounts  sales  rendered,  should 
exactly  balance,  for  you  neither  gain  nor  lose  by  consignments,  your  profits  from  such 
accounts  being  shown  through  Commission  and  Charges  accounts;  but  consigmnents  will 
very  seldom,  if  ever,  be  all  closed  out  at  any  one  time.  If  you  have  sold  parts  of  several 
consignments,  and  not  rendered  accounts  sales  of  such  consignments,  you  owe  the  con- 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


163 


Liabilities,  July  31,  190-. 


Bills  Payable 
Accts.  Pa3'able 
Present  Worth* 

Present  Worth  brought  down 

notes  outstanding 
personal  credit  balances 

4000 
8217 
5663 

37 
52 

17880 

89 

■ 

5663 

52 

5663 

52 

*To  be  entered  in  red  ink. 


signers  for  the  amotuit  sold,  and  Consignments  account  balanced  will  be  a  liabilitj^;  but 
on  the  other  hand,  yoti  may  have  accepted  or  paid  drafts  in  advance  of  sale  of  goods 
received.  In  that  case,  the  balance  of  Consignments  account  will  be  a  resource,  for  the 
consignees  owe  you  for  these  advances  until  you  have  received  enough  from  the  sales  of 
consignments  to  make  them  up.  The  balance  of  Consignments  account,  therefore,  should 
appear  in  yotir  statement  of  resources  and  liabilities  as  a  resource  or  a  liability,  as  the 
case  may  be. 

Consignments  account  when  posted  to  the  ledger  should  contain  on  its  debit  side  the 
footing  of  the  Consignments  colunni  from  the  credit  side  of  the  cash  book  and  any  debits 
which  may  have  been  posted  from  the  journal.  On  the  credit  side  should  appear  the 
footing  of  the  Consignments  column  of  the  sales  book. 

It  is  found  that  you  have  on  hand  the  following  goods: 


50  brls.  Apples,                 at 

$3-50 

16  bxs. 

Lemons, 

at  $4.00 

94  doz.  C.  Beans, 

1. 00 

5     " 

Oranges, 

5.00 

7  tubs  Butter,  420  lbs. , 

21^/ 

72  doz. 

C.  Peas, 

85^ 

27  bxs.  Cheese,  2735  lbs., 

11?^ 

3  brls. 

S.  Pickles, 

7.00 

72  doz.  C.  Corn, 

1.05 

3     J' 

Sw.  Pickles, 

9.00 

105  brls.  3X  Flour, 

4-50 

489  bu. 

Potatoes, 

62^^ 

70     "     2X  Flour, 

4-25 

I  doz. 

Pineapples, 

1.20 

55     "     Pastry  Flour, 

4-75 

133     " 

C.  Tomatoes, 

95^ 

30  doz.  Ketchup, 

2.00 

164  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

It  is  estimated  that  the  real  estate  is  worth  $9700. 

The  premium  on  the  insurance  policy  is  estimated  to  be  worth  $45.83. 

The  ofl&ce  supplies  on  hand — paper,  envelopes,  stamps,  etc. — are  valued  at  $35. 

Furniture  and  fixtures  valued  at  $225. 

Horses  and  wagon  valued  at  $292.50. 

Unsold  shipments  have  cost  you  $1253.50,  and  are  valued  at  that  amount,  as  showTi 
in  your  shipment  ledger. 

Make  a  statement  of  losses  and  gains  according  to  the  model  on  pages  160  and  161. 

The  first  part  of  this  statement  shows  the  gain  arising  from  the  regular  transactions 
of  the  business,  but  the  partners  agreed  that  the  difference  between  their  investments 
should  be  settled  by  giving  interest  to  each  partner  for  his  net  investment.  This  interest 
must  be  deducted  from  the  gain  of  the  business,  as  shown  in  the  second  part  of  the 
model  statement.  Find  the  interest  on  your  own  investment  and  on  that  of  E.  H.  Reed 
for  the  time  this  business  has  continued,  which  is  31  days.  Enter  the  amounts  of  interest 
on  the  debit  or  loss  side  of  your  loss  and  gain  statement,  as  in  the  model,  then  credit  Reed 
one-half  and  yourself  one-half  of  the  gain  which  remains,  for  these  amounts  have  been 
deducted  from  the  total  gain  of  the  business. 

Make  a  statement  of  resources  and  liabilities  according  to  the  model  on  pages  162  and 
163,  supplying  the  necessary  figures  from  your  own  books. 

Close  your  ledger,  making  the  date  July  31st.  Do  not  forget  to  enter  all  the  inven- 
tories on  the  credit  side  of  the  accounts  to  which  they  belong. 

Close  all  the  business  accounts,  writing  Loss  or  Gain,  in  red  ink,  on  the  smaller  side, 
and  transfer  these  closing  entries  to  the  Eoss  and  Gain  account.  After  this  has  been 
done,  close  the  Eoss  and  Gain  account  by  writing  GaiJi  from  the  btcsiticss,  in  red  ink,  on 
the  smaller  side  of  the  account.  Foot  and  rule,  and  bring  this  gain  from  the  business 
over  to  the  opposite  side  of  the  Eoss  and  Gain  account. 

There  is  due  each  partner  interest  at  6'i  on  his  investment  for  the  time  it  has  been  in 
the  business  (31  days).  Calculate  this  interest;  the  amount  is  $3x.x3  on  j'our  invest- 
ment and  $4x.x9  on  Reed's  investment.  This  interest  is  to  come  out  of  the  gains  of  the 
business,  therefore  enter  it  on  the  debit  side  of  the  Eoss  and  Gain  account  in  the  ledger, 
in  red  ink,  writing  E.  H.  Reed,  interest  opposite  v?/x.x(?,  and  {St2idc7it) ,  interest  opposite 
^jx.xj.  Transfer  your  interest  to  the  credit  side  of  your  account  in  the  ledger  and 
Reed's  interest  to  the  credit  side  of  his  account. 

Close  the  second  section  of  the  Eoss  and  Gain  account  by  writing,  in  red  ink,  on  the 
debit  side,  {Stude?it) ,  net gaiii,  with  one-half  the  difference  between  the  two  sides  of  the 
Eoss  and  Gain  account  as  it  now  stands,  and  also,  in  red  ink,  E.  H.  Reed,  net  gain,  with 
one-half  the  difference  of  the  account  as  it  now  stands. 

Balance  the  Eoss  and  Gain  account,  and  transfer  your  own  and  Reed's  gains  to  the 
credit  side  of  your  respective  accounts  in  the  ledger. 

The  following  model  is  the  exact  form  of  a  Eoss  and  Gain  account  corresponding  to 
the  statement  of  losses  and  gains  on  pages  160  and  161.  This  Eoss  and  Gain  account  is 
similar  in  form  to  the  Eoss  and  Gain  account  in  your  ledger. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


165 


Ivoss  AND  Gain. 


1900 
July 

31 
31 

Expense 

Real  Estate 

Furniture  and  Fixtures 

Horse  and  Wagon 

Office  Supplies 

Freight 

Discount 

Gain  from  business* 

Geo.  Ward,  interest* 
A.  H.  Gray,     "            * 
Geo.  Ward,  net  gain* 
A.  H.  Gray,    "      "      * 

64 

150 

25 

25 

5 

115 

2 

469 

856 

32 

30 
40 

52 
54 

July 

31 
31 

Shipments 

Mdse. 

Mdse.  Discount 

Commission 

Charges 

Gain  from  business 

130 
364 
215 
122 

23 

33 

35 
68 

47 
71 

856 

54 

*July 

13 

12 

221 

221 

469 

26 
71 

78 

77 

52 

July 

469 

52 

469   52 

*To  be  entered  in  red  ink. 


QUESTIONS. 

1 .  Define  commission  business,  and  state  how  a  commission  merchant  receives  payment 
for  his  services. 

2.  Define  consignor,  consignee,  consignment. 

3.  Describe  the  method  of  marking  goods  so  that  it  may  be  known  to  what  consign- 
ment they  belong. 

4.  What  is  the  consignment  ledger,  and  what  are  the  advantages  of  the  loose  leaf 
method  of  keeping  accounts  with  consignments  ? 

5.  Define  advances,  and  state  where  they  should  be  entered  in  the  consignment  ledger. 

6.  When  all  the  goods  of  a  consignment  have  been  sold  and  the  entries  of  sales  made 
in  the  consignment  ledger,  how  should  you  proceed  to  close  the  account  in  the  consign- 
ment ledger? 

7.  What  extra  columns  appear  in  the  cash  book  of  this  month? 

8 .  How  are  merchandise  discounts  posted  ? 

9.  What  items  appear  in  the  Shipments  column  on  the  debit  side  of  the  cash  book? 
On  the  credit  side  ? 

10.  What  items  should  appear  in  the  Consignments  column  of  the  cash  book? 

11.  Define  a  shipment. 

12.  What  is  the  object  of  the  shipment  ledger? 

13.  What  special  columns  appear  in  the  sales  book  ? 

14.  How  are  sales  from  consignments  indicated  in  the  sales  book? 

15.  Describe  the  account  sales  register.     What  accounts  are  posted  from  this  book? 

16.  Of  what  is  the  account  with  shipments  in  the  main  ledger  an  abstract? 

17.  Where  should  you  post  the  footing  of  the  Consignments  column  from  the  credit 
side  of  the  cash  book? 

18.  Where  should  you  post  the  footing  of  the  Sales  from  Consignments  column  of  the 
sales  book? 

19.  How  should  you  post  the  Charged  to  Account  column  of  the  account  sales  register? 

20.  What  course  is  generally  pursued  by  banks  when  an  overdraft  is  made? 

2 1 .  How  should  you  indicate  an  overdraft  on  the  stub  of  your  check  book  ? 


166  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

WHOLESALE    DRY   GOODS   BUSINESS. 

Books  Kept. — The  books  which  you  will  keep  in  this  work  are  the  joumal-daj^book, 
sales  book,  invoice  book,  cash  book,  main  ledger,  sales  ledger,  purchase  ledger,  and  bill  book. 

Journal-Daybook. — On  the  debit  side,  the  journal-daybook  is  provided  with  the  fol- 
lowing columns:  Accounts  Paj-able,  General,  Bills  Receivable.  All  notes  received  are 
entered  in  the  Bills  Receivable  column.  The  several  items  in  this  column  are  not  posted. 
The  footing  of  the  column  is  posted  to  the  debit  of  Bills  Receivable  in  the  main  ledger. 
(See  Model  Journal,  page  167.) 

When  a  creditor  is  paid  by  giving  him  a  note  or  draft,  he  should  be  charged  in  the 
column  entitled  "Accounts  Payable."  The  several  items  in  this  column  are  posted  to  the 
debit  of  the  proper  accounts  in  the  purchase  ledger.  The  footing  of  this  column  is  posted 
to  the  debit  of  Accounts  Payable  in  the  main  ledger. 

Debit  journal  entries  other  than  those  provided  for  above  are  entered  in  the  General 
column.  The  several  items  in  this  column  are  posted  to  the  debit  of  the  proper  accounts 
in  the  main  ledger.     The  footing  is  not  posted. 

The  journal-daybook  is  provided  with  the  following  columns  on  the  credit  side: 
Accounts  Receivable,  General,  Bills  Payable.  Whenever  one  of  your  customers  gives 
you  a  note  or  draft  on  account,  he  is  credited  with  the  amount  of  the  payment  in  the 
column  entitled  "Accounts  Receivable."  The  several  items  in  this  column  are  posted  to 
the  credit  of  the  proper  accounts  in  the  sales  ledger.  The  footing  of  this  column  is  posted 
to  the  credit  of  Accounts  Receivable  in  the  main  ledger. 

When  you  issue  your  note  on  account  the  credit  entry  is  made  in  the  Bills  Payable 
column.  The  footing  of  this  column  is  posted  to  the  credit  of  Bills  Payable  in  the  main 
ledger.     The  several  items  are  not  posted. 

All  credit  journal  entries  other  than  those  provided  for  above  are  made  in  the  General 
column.  The  several  items  in  this  column  are  posted  to  the  credit  of  the  proper  accounts 
in  the  main  ledger.     The  footing  is  not  posted. 

Cash  Book. — On  the  debit  side  the  cash  book  is  provided  with  the  following  columns: 
Amount  of  Invoice,  Discount  Allowed,  Amount  Received,  Merchandise,  Sundry.  (See 
form  of  Cash  Book,  pages  168  and  169.) 

When  a  customer  pays  you  on  account,  the  amount  of  the  invoice  is  entered  in  the 
column  entitled  •''Amount  of  Invoice."  If  discount  is  allowed,  the  amount  of  the  discount 
is  entered  in  the  colunni  entitled  "  Discount  Allowed."  The  amount  of  cash  received  is 
entered  in  the  column  entitled  "Amount  Received."  All  cash  sales  of  merchandise  are 
entered  in  the  column  entitled  "  Merchandise."  Other  debit  entries  are  made  in  the  col- 
umn entitled  "  Sundry." 

The  several  items  in  the  column  entitled  "Amount  of  Invoice  "  are  posted  to  the  credit 
of  the  proper  accounts  in  the  sales  ledger.  The  footing  of  this  column  is  posted  to  the 
credit  of  Accounts  Receivable  in  the  main  ledger.  The  footing  of  the  column  entitled 
"  Discount  Allowed"  is  transferred  to  the  credit  side  of  the  cash  l)ook  and  posted  to  the 
debit  of  Discount  on  Sales  in  the  main  ledger.  Neither  the  items  nor  the  footing  of  the 
column  entitled  "Amount  Received"  is  posted.  The  .several  items  in  the  Sundry  colunm 
are  posted  to  the  credit  of  the  proper  accounts  in  the  main  ledger.  The  footing  of  the 
column  entitled  "  Merchandise"  is  posted  to  the  credit  of  Merchandise  Sales  in  the  main 
ledger. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


167 


MoDEiv  Journal,  August  i,   190-. 


Accts.  Pay. 


1600 


General. 


125 


50 

5  0 


5200 

00 

120 

00 

24800 

00 

25900 

00 

15 

50 

3000 

GO 

I30CO 

00 

600 

00 

250 

00 

B.  Rec. 


3200 


00 


1725 
4390 


79001 


50 
40 


40 


845  I  20 


345 

43  a  u 


20 

•4  0 


I,.  F. 


V 

V 


Edward  Deane  ha.s  this  day  been 
admitted  into  partnership  with  Geo. 
W.  Barnes  and  C.  M.  Lyon  under 
conditions  shown  in  articles  of  co- 
partnership executed  on  the  same 
date. 

The  investment  of  each  partner 
and  the  resources  and  liabilities  of 
the  old  firm  are  shown  in  the  fol- 
lowing entries,  and  a  new  set  of 
books  is  opened  showing  the  fol- 
lowing balances. 


Cash  In  Traders  Bank 

"    safe 
Mdse.  Per  inventory 
Bills  Receivable      "    bill  book 
Accts.  Rec.  "    sales  ledger 

Interest  Accrued 

Furniture  Valued  at 

Real  Estate  "        " 

Horses  &  Wagons 


Insurance 
Accts.  Pay. 

Bills  Payable 

Interest 

Discount 


Unexpired 
Per  purchase  led- 
ger 
Per  bill  book 
Accrued 
On  bills  rec. 


Geo.  W.  Barnes  Investment 

"      "  "      Private 

CM.  Lvon        Investment 
"     "       ^"  Private 


B.  Martin  &  Co.     Note  at  4  m.  on 
Bills  Pay.  acct. 

15 

Bills  Rec.  In  full  to  date  by 

D.H.Cross&Co.     4  m.  note 


22 


B.  Rec.  Dft.  at  10  da.  for 

Curtis,  Hines &     invoice  7/4 
Co. 


29 


R.H.White  &  Co.  Returned 

Mdse.  Pm-chases 

Accts.  Payable,  Dr. 

B.  Receivable,  Dr. 

Accts.  Receivable,  Cr. 

B.  Payable,  Cr. 


Accts.  Rec. 


S45 


345 

1  1  9  U 


20 


20 

4  U 


General. 


Bills  Pay. 


24500 
140 

6 

20151 

18202 

600 

485 


125 


1 190 
13600 

79001 


00 

50 
50 
40 
10 
00 
00 


12000 


00 


1600 

13  6  0  0 


50 

40 
40 


168 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Date. 

L  F 

NAME   AND    EXPLANATION 

Amount 
or  Ijrvoic*. 

Disc,        j 
Allowed     | 

Amovkt 
RectiTiD, 

Ukecravdul 

SvKDtT. 

/ 

~/Kja-C^ez-<f^i^-t:^<i-^ 

22  6j^fS 

/ 

4/ 

yf<f 

f 

f^ 

4^rd^ 

c<^ 

/ 2£>  0 

6 

6 

/ 

d  /P-O 

/  f 

^^2 

2'i^2 

7^ 

/ 

y^^ 

2  ■^4^ 

z-^^ 

f 

/  0 

/  z 

/ 

f./.j 

^7 

v^ 

/v^ 

•J--J 

■^/^ 

^^ 

/  < 

/2  a 

3  6 

<ifA^ 

'72/'  r^> 

^'^yr 

^  / 

4^/ 

2r/-^ 

sv 

6^-s 

J'/ 

^f77 
/  /  tp 

U    -» 

'7 

y^^-e^LiL-^i.-^-^::y£^.■-c!^t.<i^ 

,.... 

\ 

<f-^j-6 

4^ 

On  the  credit  side  the  cash  book  is  provided  with  the  following  columns:  Amount  of 
Invoice,  Discount  Allowed,  Amount  Paid,  Collection  and  Exchange,  Sundry. 

When  you  pay  one  of  your  creditors  on  account,  the  amount  of  the  invoice  should  be 
entered  in  the  column  entitled  "Amount  of  Invoice."  If  discount  is  allowed,  the  amount 
of  the  discount  is  entered  in  the  column  entitled  "  Discount  Allowed."  The  amount  you 
pay  in  ca.sh  is  entered  in  the  column  entitled  "Amoiuit  Paid."  Cash  payments  for  collec- 
tion and  exchange  are  entered  in  the  column  entitled  "  Collection  &  Kxchange."  All 
other  credit  cash  book  entries  are  made  in  the  Sundry  colunui. 

The  several  items  in  thecolunm  entitled  "Amount  of  Invoice"  arc  jiosted  to  the  debit 
of  the  proper  accounts  in  the  purchase  ledger.  The  footing  of  this  column  is  posted  to 
the  debit  of  Accounts  Payable  in  the  main  ledger.  The  footing  of  the  cohnnn  entitled 
"  Discoinit  Allowed"  is  transferred  to  the  debit  side  of  the  cash  book,  and  the  amount 
posted  to  the  credit  of  Discount  on  Purchases  in  the  main  ledger.  Neither  the  items  nor 
the  footing  of  the  cohnnn  entitled  "Amount  Paid  "  is  posted.  The  .several  items  in  the 
Sundry  column  are  posted  to  the  debit  of  the  proper  accounts  in  the  main  ledger.  The 
footing  of  the  column  entitled  "Collection  <S:  Exchange"  is  posted  to  the  debit  of  Colkc- 
tion  &  Exchange  in  the  main  ledger. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


169 


Date. 

L,F 

NAME    AND    EXPLANATION 

Amount 
OF  Invoice. 

Disc 
Allowed 

AuoucT    Paid 

Collection  a 
Exchange, ' 

.Sundry 

Oc-c^^ 

:  / 
/ 
/ 

■J^<?<? 

/  2 

vJ:/-^ 

/ 

^^ 

/  ^IP 

J 

^^/:z^£^^zt/^'^       ^-A^^^X 

'P'^J'lP 

^7 

^e 

pryz 

Si} 

/  -^Z  ^  J'l:? 
/  -^  Z  / 

^ 

- 

-^^^,  P^^^-cJ^,                               .'t^^^.-C^^^, 

^-^ 

- 

6 

- 

"^  .^~^a^-t^U^  i<^^/tp^^z^         7!:-t:f^^L^  z-'^ 

f2  ^ 

J'lP 

/r 

^/ 

f£>Z 

^^ 

^ 

<^/i^;*4-<i'*Z.<:i-,:i^                        -<::^^iz^*^^2:j;^Z^  _e.2i^< 

/  2 

^(^ 

f/Z 

■/J 

- 

^4^^ 

Z<^ 

^z 

z6 

<ri:;Z 

^-^ 

z 

^^ 

,.7j 

Zf/S 

Z'^Z-JT 

7^ 

/  /  £> 

/  7 

^r^^-j- 

^^ 

^ 

^,« 

/^ 

=-c:2i.«^  i5*^e — cr^^^z^^^i^,  ^~<^ i'-y-iZ^^^^i^          =xi2^ 

f 

.<// 

- 

1^^^-/^  >^^Z>^^                   ^^^ 

^ 

vC? 

« 

~7U£Z^^>gZ-'f'2.^^^             .      -rf-ayi:-        ^  -^  ^ ■<-        * 

3J=^7S  /ijT 

</or.jr/ 

yT;? 

Licrtg-ers. — The  purchase  ledger  should  include  the  accounts  of  all  persons  from  whom 
you  buy  goods.     It  does  not  differ  in  form  from  any  other  ledger. 

The  sales  ledger  should  include  the  accounts  of  all  persons  to  whom  you  sell  goods. 
It  does  not  differ  in  form  from  your  main  ledger. 

Your  main  ledger  should  include  all  the  accounts  of  the  business  which  are  not  entered 
in  the  purchase  ledger  or  the  sales  ledger.  The  difference  between  the  sides  of  the 
Accounts  Payable  account  in  the  main  ledger  should  always  agree  with  the  difference 
between  the  sides  of  the  purchase  ledger.  The  difference  between  the  sides  of  the 
Accounts  Receivable  account  in  the  main  ledger  should  at  all  times  agree  with  the  differ- 
ence between  the  sides  of  the  sales  ledger. 

Invoice  Book  and  Sales  Book. — These  books  will  not  differ  in  form  from  those 
previously  kept,  but  in  the  sales  book  cash  sales  are  placed  in  the  cash  column. 

Bill  Book. — The  bill  book  will  be  kept  as  an  auxiliary  book;  that  is,  a  record  of  all 
notes  received  and  issued  will  be  made  in  it,  but  no  posting  will  be  done  therefrom.  Some 
bookkeepers  post  directly  from  the  bill  book  and  keep  no  Bills  Receivable  nor  Bills  Pay- 
able account  in  the  main  ledger. 


170 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


WORK    FOR   THE    STUDENT. 
August  i,   190-. 

You  have  entered  into  partnership  this  day  with  H.  W.  Taylor  and  Clark  F.  Wood, 
who  have  been  conducting  a  wholesale  dry  goods  business  under  the  style  of  Taylor  & 
Wood.  The  name  of  the  new  firm  will  be  Taylor,  Wood  &  Co.,  and  its  purpose  will  be 
to  purchase  and  develop  the  business  of  the  firm  of  Taylor  &  Wood. 

The  partnership  is  to  continue  five  years,  unless  sooner  dissolved  by  mutual  consent 
of  the  partners.  You  are  to  invest  $2500  cash  in  the  business,  and  Ta3'lor  and  Wood  the 
net  investments  as  shown  by  their  respective  interests  in  the  schedule  of  resources  and 
liabilities  given  below. 

Since  you  are  an  experienced  salesman,  j'ou  will  receive  $175  per  month  as  salary, 
Taylor  $150,  and  Wood  $125. 

Each  partner  shall  at  the  close  of  each  year,  or  sooner  if  the  books  are  closed  before 
the  end  of  the  year,  be  charged  with  interest  at  6  r  on  such  sums  as  he  may  have  with- 
drawn from  the  business  for  his  personal  use;  from  the  date  such  sums  were  drawn  until 
the  end  of  the  year,  or  to  such  time  of  closing  the  books,  and  he  shall  receive  6'?  interest 
on  his  investment.  It  is  also  agreed  that  no  member  of  the  firm  shall  draw  to  exceed 
$250  per  month  for  his  personal  use. 

Prepare  articles  of  copartnership  embodying  the  above  conditions. 

The  resources  of  the  firm  of  Taylor  &  Wood,  which  are  to  be  purchased,  and  the 
liabilities  of  that  firm,  which  are  to  be  assumed  by  the  new  firm,  are  as  follows: 


INVENTORY,  JULY  31.   190 

2400  yds.  at  .10 
900    " 


60  pes.  Denim, 

25    "    Black  Venetian,     900  "  i.io 

25    "    Blue  Flannel,  1250  "          ,20 

20    "    Broadcloth,  1200  "  3.25 

22    "    Creton  Plaid,  895  "          .11 

200    "    Crown  Lining,  10838  "          .06 

30    "    Corduroy,  1108  "          .60 

40    "    Cashmere,  1650  "          .48 

400 doz.Coates  Thread,  -37/^ 

30  pes.  Duchess  Satin,  1500  "  1.65 

300    "    Fruit  of  Loom 

Sheeting,  18000  "          .07 

20    "    French  Crepon,  760  "  1.50 

36    "    Kersey,  54  in.,  1650  "          .98 

150    "    Monument  Cot- 
ton, 9000  "          .05^ 


20  pes.  Ox. Gray  Home- 
spun lOOO}' 
40    "    Plain  French 

Poplin,  1800 

200    "    Pique  Muslin,  14000 

500 Gro. Smoked  Pearl 
Buttons, 

45  pes.  Surah  Silk,  2275 

35    "    Storm  Serge,  1575 

100    "    Sateen,  4900 

100    "    Talbot  Flannel,  4421 

600 doz.  Torchon  Lace, 
20  pes.  Velveteen,  740 

30    "    Whipcord,  1270 

ICO    "    Wash  Silk,  5160 


ds.  at  .90 


(  i 

•95 

i  ( 

.I2J4 

•50 

( ( 

•44 

( ( 

.60 

( 1 

.08^ 

i  ( 

•23 

.60 

i  i 

•24 

t  ( 

I  1 

.80 

.4.S 

RESOURCES 


Merchandise, 
Accounts  receivable. 
Bills 
Interest, 


per  inventory, 
"    schedule, 
"    billhook, 
accrued, 


$26609.96 

20442.75 

2102.45 

17.48 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


171 


Cash, 


in  Commercial  Bank,  $5185.00 
per  schedule, 


(.  in  safe,  675.00 

Furniture, 

Real  estate.  Flat  at  #74  Center  St., 

Horses,  wagons  and  harnesses, 
Insurance,  unearned  premium, 


Make  journal  entries  for  the  above  accounts  as  in  model,  page  167. 


PFRSONAL  ACCOUNTS  RECEIVABLE. 


Harris  &  Smith,  City, 

Brown  &  Wilson,  Troy, 

Jas.  H.  Wood  &  Son,  Newton, 

L.  H.  Parker,  Lima, 

Sibley  &  Co.,  Gardner, 

W.  B.  Snow,  Akron, 

Ingham  &  Case,  Alton, 

B.  C.  Wiley,  Waverly, 

J.  G.  Smith,  Ottawa, 

W.  O.  Harrison,  Randolph, 

Lewis  W.  Chase,  Jackson, 

Carlton,  Sons  &  Co.,  Dansville, 


5860.00 

^500.00 

12000.00 

750.00 

275.00 


70557-64 

LIABILITIES. 

Accounts  payable. 

pel 

■  schedule, 

19264.69 

Bills 

i  i 

bill  book, 

10500.00 

Interest, 

accrued. 

128.25 

Discount, 

on  bills  rec. 

2.76 

H.  W.  Taylor, 

investment, 

15800.00 

C.  F.  Wood, 

( ( 

23911.94 

Taylor, 

private, 

400.00 

Wood, 

( ( 

550.00 

70557-64 


$4577-94 
1324. II 

1016.42 

1203.86 

2943.01 

536.88 

66.35 
122.44 

914-13 
1682.12 

3695-42 
2360.07 


$20442.75 
Enter  the  above  accounts  in  your  sales  ledger,  allowing  one-fourth  page  to  each  account. 


PERSONAL   ACCOUNTS   PAYABLE. 

Sibley,  Lindsay  &  Curr  Co.,  New  York, 

Burke,  FitzSimons,  Hone  &  Co.,  Boston, 

Gimbel  Bros.,  Philadelphia, 

Granite  Mills,  Fall  River,  Mass., 

Little  Falls  Woolen  Co.,  Little  Falls,  N.  Y., 


$10184.23 

2837.90 

4628.71 

904.85 

709.00 

$19264.69 


172  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

Enter  the  preceding  accounts  in  your  purchase  ledger,  allowing  one-half  page  to  each 
account. 

BILLS   RECEIVABLE. 

Note  of  C.  F.  Jenkins  for  $407.32,  dated  May  i8th,  payable  at  First  National  Bank, 
Marietta,  Ohio,  drawn  at  three  months  with  interest. 

Note  of  Wilson  &  Randolph  for  $654.90,  dated  June  14th,  payable  at  Merchants  Bank, 
Buffalo,  N.  Y.,  drawn  at  two  months  with  interest. 

Note  of  Warren  &  Co.  for  $325.00,  dated  July  23d,  payable  at  Traders  Bank,  Scranton, 
Pa.,  drawn  at  60  days  without  interest. 

Note  of  Isaac  Holman  &  Sons  for  $715.23  , dated  June  ist,  payable  at  Second  National 
Bank,  Newark,  N.  J.,  drawn  at  three  months  with  interest. 

BILLS    PAYABLE. 

Note  in  favor  of  Commercial  Bank  for  $10000.00,  dated  May  20th,  drawn  at  four 
months  with  interest. 

Note  in  favor  of  lyittle  Falls  Woolen  Co.  for  $500.00,  dated  April  24th,  drawn  at  four 
months  with  interest. 

Enter  the  above  notes  in  vour  bill  book.  You  will  find  the  bills  receivable  anions: 
your  incoming  vouchers.  Examine  these  notes,  and,  if  correct,  write  Taylor  &  Wood  on 
the  back  of  each  note  (thus  indorsing  the  notes  to  the  new  firm),  and  place  them  in  3'our 
Cash  Drawer.     Write  the  two  bills  payable,  and  place  them  in  your  Bills  Payable  File. 

In  the  list  of  resources  is  an  item  of  interest,  $17.48.  Interest  has  accrued  on  three 
of  the  bills  receivable,  so  that  they  are  now  worth  more  than  their  face  value.  It  is  there- 
fore necessary,  in  opening  this  set  of  books,  to  find  the  present  value  of  all  notes,  in  order 
to  determine  the  actual  net  investment. 

The  amount  of  interest  due  from  others  to  date  is  found  to  be  $17.48,  and,  being  an 
available  resource  ahead}-  earned,  it  is  so  inventoried.  In  the  same  way,  interest  accrued 
on  our  own  promises  to  pay  is  a  liability  aheady  incurred,  and  must  be  inventoried  to 
show  all  outstanding  obligations. 

The  note  of  Warren  &  Co.,  drawn  without  interest,  will  not  be  worth  its  face  value 
mitil  maturity.  Computing  the  discount  to  maturity,  we  find  the  present  worth  to  be 
$2.76  less  than  the  face  value.  This  amount  is  credited  to  Discount;  always  debit  Bills 
Receivable  and  credit  Bills  Payable  for  their  face  value.  (See  journal  entry  Aug.  ist, 
page  167.) 

Open  accounts  in  the  main  ledger  with  all  the  items  in  the  list  of  resources  and  liabili- 
ties, carrying  inventory  of  merchandise  to  Merchandise  Purchases  account.  Open  invest- 
ment accounts  on  page  i,  and  private  accounts  on  page  2.  For  ledger  explanations,  write 
Inventory  for  accounts  with  Merchandise  Purchases,  Interest,  Discount,  Insurance,  Horse 
and  Wagon,  Furniture,  and  Real  Estate;  for  all  others,  write  Balance.  (Allow  one-half 
page  to  each  account. ) 

The  company  has  decided  to  continue  the  lease  of  the  store  at  Nos.  69  and  71  Second 
St.,  paying  $300  monthly  in  advance. 

Place  balance  in  bank  on  stub  of  check  book,  or  deposit  in  school  bank.  Place  balance 
of  cash  in  Cash  Drawer. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  173 


ROUTINE  OF  WHOLESALE  DRY  GOODS  BUSINESS. 

August,  190-. 

No.  1. — August  i.  Count  the  cash  in  the  envelope,  and  credit  (Student)  in  the 
Sundry  column  of  the  cash  book. 

No.  2, — Invoice  of  W.  O.  Harrison,  Randolph,  being  12  days  overdue,  draw  a  sight 
draft  on  him  for  the  amount,  $750.     On  the  back  of  the  draft  make  indorsement  as  follows: 

Pay  to  the  Commercial  Bank,  or  order, 

Taylor,  Wood  &  Co., 

Per  (Your  name) . 

(Sign  the  company  name  to  all  vouchers,  per  your  own  name.) 

Place  the  draft  in  Vouchers  for  Others,  or  leave  it  at  the  bank  for  collection. 

No.  3. — Give  a  check  for  the  amount  of  this  bill.  (Debit  Furniture  in  the  Sundry 
column  of  the  cash  book.) 

No.  4. — Make  a  bill  for  this  order.  Terms,  die  10  days,  5^  30  days.  Enter  in  the 
sales  book — 5  pes.  Monument  cotton,  62,  59,  58,  64,  63  J^  yds.  2  pes.  Creton  plaid,  41, 
38  yds.  3  pes.  French  crepon,  36,  40,  37  yds.  5  pes.  wash  silk,  48^,  49,  51.  52,  51^ 
yds.     2  pes.  Duchess  satin,  48,  51  yds.      10  doz.  lace. 

In  the  dry  goods  business  there  are  two  kinds  of  terms  for  different  classes  of  goods — 
domestic  and  regular.  Domestic  terms  are  2^  10  days,  i^  30  days;  regular  terms  are  6,'^ 
10  days,  5?j  30  days,  and  no  bills  to  run  longer  than  30  days.  In  this  work  the  terms  will 
be  given  for  each  sale.    Your  teacher  will  assign  you  a  price  list  from  lists,  pages  194,  195. 

No.  5. — August  3.  Send  your  traveling  man,  H.  R.  Judson,  on  his  eastern  trip,  and 
give  him  $200  cash. 

Debit  Traveling  Expenses  in  the  Sundry  column.     Place  $200  in  Cash  Paid  Out. 

No.  6. — August  4.  Give  check  to  C.  H.  Garfield,  Agt. ,  $300,  rent  for  August.  (Debit 
Expense. ) 

No.  7. — Sold  to  Geo.  M.  Walker,  City,  for  check,  i  piece  Oxford  gray  homespun,  50 
yds.    3  pes.  storm  serge,  43,  45,  46  yds.     i  piece  Duchess  satin,  50  yds.  3  pes.  surah  silk, 

49^,  4i>^,  43  yds. 

Make  entry  in  the  cash  book,  crediting  Merchandise  in  special  column.  Enter  sale  in 
sales  book,  and  extend  total  into  cash  column;  check  the  entries  as  in  previous  work. 

No.  8. — This  check  is  in  payment  of  invoice  of  July  i8th,  $826.30,  less  2,^  discount. 

Enter  on  the  debit  side  of  the  cash  book  as  follows:  $826.30  in  Amount  of  Invoice  col- 
umn, amount  of  discount  in  Discount  Allowed  column,  and  amount  of  check  in  Amount 
Received  column. 

No.  O. — Fill  out  deposit  slip,  depositing  cash,  $2000,  and  checks  of  L.  H.  Parker  and 
Geo.  M.  Walker.  Collection,  yV^  of  Parker's  check.  Debit  Collection  and  Exchange  \vl 
the  cash  book.     Deduct  the  collection  from  the  amount  on  the  deposit  slip. 


174  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

No.  10. — August  6.  Make  your  check  in  favor  of  Little  Falls  Woolen  Co.  for  invoice 
of  July  15th,  $409,  less  discount  5'<. 

Enter  on  the  credit  side  of  the  cash  book  as  follows:  $4og  in  Amount  of  Invoice  column, 
amount  of  discount  in  Discount  Allowed  column,  and  amount  of  your  check  in  Amount 
Paid  column. 

No.  1 1. — This  note  is  received  from  W.  B.  Snow,  in  payment  of  balance  due  Aug.  ist. 
Credit  W.  B.  Snow  in  Accounts  Receivable  column  of  the  jotirnal.     Make  entry  in 
the  bill  book,  and  write  Int.  over  the  number  of  days  in  the  Time  column. 

No.  12. — Discount  Snow's  note  at  the  Commercial  Bank,  and  receive  credit  for  the 
proceeds. 

Find  the  interest  on  $536.88  for  the  full  time,  and  add  it  to  the  face  of  the  note;  then 
find  the  discount  to  maturity  on  that  amount.  Enter  in  the  Sundry  column  on  both  sides 
of  the  cash  book.  Credit  Interest  and  Bills  Receivable ;  debit  Discoiint.  Indorse  the  note 
in  full  to  the  Commercial  Bank,  and  leave  it  at  the  bank,  having  the  net  proceeds  credited 
in  your  bank  pass  book.  Add  the  proceeds  to  your  bank  balance  on  the  stub  of  the  check 
book.  If  you  have  no  bank,  make  the  entry  in  jour  bank  pass  book,  and  place  the  note 
in  Vouchers  for  Others. 

No.  13. — This  is  what  is  known  as  a  shipper's  order.  Bill  the  goods  in  the  usual  way, 
as  follows:  4  pes.  Talbot  flannel,  44,  40,  45,  47  yds.  2  pes.  storm  serge,  48,  42  3-ds.  4 
pes.  corduroy,  40^,  49,  47^,  39  yds.     2  pes.  surah  silk,  43^,  463^  yds. 

We  find  that  the  box  of  goods  weighs  200  lbs.  Fill  out  a  freight  receipt  and  have  the 
freight  agent  sign  it.  Make  a  sight  draft  in  favor  of  the  Union  National  Bank  for  the 
amount  of  your  bill,  pin  it  to  the  bill  of  lading,  and  send  it  to  the  Union  National  Bank. 
(Place  in  Vouchers  for  Others.) 

For  various  reasons,  it  is  often  desirable  to  make  the  collection  of  the  purchase  price 
before  the  goods  are  delivered  to  the  customer.  Such  shipments  by  express  are  sent 
C.  O.  D.,  and  by  freight,  subject  to  shipper's  order.  It  is  customary  to  collect  in  this 
manner  when  the  credit  of  the  customer  is  limited,  or  has  not  been  fully  investigated. 

No.  14. — Invoice,  Burke,  FitzSimons,  Hone  &  Co.  Check  the  items,  O.  K.  the  bill, 
and  paste  it  in  the  invoice  book.     Note  the  terms. 

No.  15. — This  check  is  in  payment  of  invoice  of  July  28th,  $550,  less  2I!  discount. 
(Enter  as  in  No.  8.) 

No.  10. — Mr.  Taylor  wishes  some  money  for  his  private  use.  Give  him  $200  in  cash, 
and  charge  it  to  his  private  accoimt.     (Cash  book,  Simdry  colunui. ) 

No.    17. — Pay  freight  to  date,  $46.25,  in  cash.     (Cash  book.  Sundry  cohunn.) 

No.  IS. — August  8.     This  check  is  in  full  of  accotuit  to  Aug.  ist. 

No.  11>. — Deposit  cash,  $685,  and  checks  on  hand.  Bank  charges  $2.00  for  collection. 
Deduct  amount  of  collection  on  the  deposit  ticket,  and  enter  in  the  cash  book. 

No.  20.— Pay  Sibley,  Lindsay  &  Curr  Co.  for  in\-'oico  of  July  2Sth,  $3200.  Deduct  5'^ 
discount,  and  write  a  check  for  the  net  amount. 

No.  lil. — August  10.  Cash  sales.  Perkins  &  Bro\\ni,  50  doz.  Torchon  lace.  40 
gross  smoked  pearl  buttons. 

Carroll  &  Marsh,  i  piece  whipcord,  50  yds.      i  piece  plain  I'reiich  i)oi)lin,  40  yds. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  175 

Strong  &  Carlisle  (check),  3  pieces  black  Venetian  cloth,  36,  38,  40  yds.  2  pes.  broad- 
cloth, 55,  59  yds. 

No.  22. — August  ii.  Check  received  for  invoice  of  July  15th,  $122.44,  less  i^ 
discount. 

No.  23. — Two  pieces,  43  and  38  yds.,  of  the  French  crepon  received  from  Burke, 
FitzSimons,  Hone  &  Co.  on  the  6th  inst.  are  found  to  be  damaged.  Return  the  two  pieces 
to  them,  billing  at  cost  price.     Write  a  letter  and  enclose  the  bill. 

Bnter  in  the  journal,  debiting  Burke,  FitzSimons,  Hone  &  Co.  in  Accounts  Payable 
column,  and  crediting  Merchandise  Purchases  in  the  General  column. 

In  this  set  merchandise  returned  by  us  will  be  credited  to  the  Merchandise  Purchases 
account,  and  goods  returned  to  us  charged  to  Merchandise  Sales  account.  Sometimes  it 
is  desirable  to  open  additional  accounts;  as.  Merchandise  Returned  to  Us  and  Merchan- 
dise Returned  by  Us. 

No.  2-4. — August  12.  This  note  is  received  on  account.  (Bills  Receivable  and 
Accounts  Receivable  columns  in  journal.) 

No.  25. — Pay,  by  check,  invoice  of  Gimbel  Bros,,  July  15th,  $1250,  less  i^.  (Enter 
as  in  No.  10.) 

No.  26. — Cash  sales.  National  Emporium,  5  pes.  wash  silk,  475^,  49 J^,  53,  54, 
46 J^  yds.     2  pes.  cashmere,  41,  39  yds. 

Sherman  &  Co.,  2  pes.  French  crepon,  43,  37  yds.  6  pes.  ::248  velveteen,  40,  45,  36, 
38,  45,  46  yds. 

No.  27. — August  13.  Wamsutta  Mills  stock  is  selling  to-day  at  $105  per  share. 
The  company  has  decided  to  purchase  ten  shares  as  an  investment.  Give  a  check  for  the 
amount  of  the  stock,  and  place  the  stock  certificate  in  the  envelope  for  incoming  vouchers. 
(Debit  Wamsutta  Mills  Stock  in  Sundry  column  of  cash  book.) 

No.  28. — Check  received  in  payment  of  invoice  of  July  20th,  $1540,  less  Vc  discount. 

No.  29. — The  bank  has  collected  your  draft  of  the  ist  inst.  on  W.  O.  Harrison,  $750. 
Collection  charges,  75'/'. 

Credit  W.  O.  Harrison  in  the  cash  book  for  the  full  amount  of  the  draft,  and  debit 
Collection  and  Exchange.     Add  the  proceeds  to  your  bank  balance. 

No.  30. — August  14.  This  check  is  for  note  and  interest  due  to-day.  Consult  your 
bill  book  and  mark  the  note  paid.     Credit  Interest  for  the  amount  of  interest  paid. 

No.  31. — Salesmen's  orders.  Bill  the  first  three  orders  G'J  10  days,  5^  30  days;  make 
the  terms  on  Roberts'  invoice  net  cash.     Ship  as  follows: 

Thompson  &  Bulkeley,  Easton,  6  pes.  Fruit  of  lyoom  sheeting,  58,  60,  55,  64,  66, 
58  yds.  8  pes.  Monument  cotton,  54,  58,  68,  62,  55,  65,  63,  60  yds.  50  doz.  Coates 
thread.     5  pes.  wash  silk,  48^,  ^o^i,  52,  48^^,  55  yds. 

James  H.  Wood  &  Son.,  Newton,  6  pes.  pique  muslin,  68^,  66,  74,  75,  71,  70^^  yds, 
4  pes.  broadcloth,  57,  65,  66,  51  yds.     2  pes.  Creton  plaid,  40,  42  yds.     25  doz.  torchon  lace. 

Brown  &  Wilson,  Troy,  5  pes.  sateen,  48^,  47^,  50,  46^,  50  yds.  5  pes.  Crown 
lining,  52,  58,  53,  55,  57  yds.     25  doz.  Coates  thread. 

C.  H.  Roberts,  Westboro,  3  pes.  kersey,  54  in.,  45,  48,  43  yds.  -  20  gross  smoked  pearl 
buttons. 


176  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

Xo.  32. — This  invoice  is  for  merchandise  purchased  of  the  Little  Falls  Woolen  Co. 
Check  the  items,  O.  K.  the  bill,  and  paste  it  in  the  invoice  book.     Note  the  terms. 

Xo.  33. — Mr.  Wood  withdraws  $225  cash.     Charge  to  his  private  account. 

No.  34. — Paj^  Sibley,  Lindsay  &  Curr  Co.,  by  check,  for  invoice  of  July  14th,  $904.85, 
less  i^  discount. 

Xo.  35. — Deposit  cash,  $200,  and  all  checks.     Collection,  $1.75. 

Xo.  36. — August  15.  Pay  cash  for  office  supplies,  stamps,  etc.,  $18.60.  Clerk  hire, 
$70.     (Charge  clerk  hire  to  Salaries  &  Help.) 

Xo.  37. — Invoice  of  merchandise  from  Sibley,  Lindsay  &  Curr  Co.  (See  instructions 
for  No.  32.) 

Xo.  38. — This  check  is  for  the  net  amount  of  invoice  of  July  i6th. 

Xo.  39. — Make  your  check  in  favor  of  Little  Falls  Woolen  Co.,  for  invoice  of  July 
29th,  $300,  less  2fc  discount. 

Xo.  40. — August  17.  This  remittance  is  for  proceeds  of  the  draft  of  the  6th  inst.  on 
Ingham  &  Case,  sent  to  the  Union  National  Bank  for  collection.  Charges  for  collection, 
50^'.  (Credit  Ingham  &  Case  for  the  full  amount,  and  debit  Collection  and  Exchange  for 
the  collection.) 

Xo.  41. — Cash  sales.  Geo.  M.  Walker,  City,  50  gross  smoked  pearl  buttons,  i  piece 
Duchess  satin,  48  yds. 

H.  W.  Johnson  &  Son,  City,  i  piece  plain  French  poplin,  50  yds.  i  piece  Oxford 
gray  homespun,  48  yds. 

Xo.  42. — Pay  freight  in  cash,  $68.45. 

Xo.  43. — August  18.  Check  received  for  note  and  interest  due  to-day.  Consult  bill 
book,  and  enter  as  in  No.  30. 

Xo.  44. — Invoice  of  merchandise  purchased  from  Granite  Mills.  (See  instructions 
for  No.  32.) 

Xo.  45. — This  check  is  received  on  account.      (No  discount.) 

Xo.  40. — Deposit  all  checks  and  drafts.     Collection,  $2.00. 

Xo.  47. — Draw  $100  in  cash  on  your  own  private  account. 

Xo.  48. — Remit  Burke,  FitzSimons,  Hone  &  Co.  check  in  payment  of  invoice  of  July 
22d,  $2837.90,  less  V'^  discoimt. 

Xo.  49. — AuGUvST  19.     Pay  freight  in  cash,  $10.50. 

X'^o.  50. — W.  O.  Harrison  is  unable  to  settle  his  accotmt  at  present,  and  il  has  been 
decided  to  take  his  note,  with  interest,  for  the  balance  due  from  him,  $932.12.  (Enter  in 
Bills  Receivable  and  Accounts  Receivable  columns  of  the  journal.) 

Xo.  51. — Pay  cash  for  1  ton  hay  and  5  l)u.  oats  for  stable,  $13.50.  (Debit  Expense, 
Sundry  column  of  cash  book.) 

Xo.  52. — August  20.  Bill  this  order  as  follows;  terms,  2',i  10  days,  1%  30  days.  8 
pes.  denim,  38^^,  39,  41 1^,  46,  35,  373/^,  35,  42  yds.  7  i^cs.  sateen,  48,  45,  463^,  50,  49^^, 
515^,  49  yds.  5  pes.  sheeting,  60,  62,  65,  55,  59  yds.  8  pes.  Crown  lining.  52,  55,  54. 
56,  60,  51,  58,  50  yds.  4  pes.  Duchess  satin,  48^,  49J^,  52,  50  yds.  4  im:s.  blue  llannel, 
50,  48,  49,  54  yds.      10  gross  Inittons. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  177 

No.  53. — Bill  this  order  as  follows;  terms,  2^  10  days,  ifc  30  days.  5  pes.  denim,  38^ , 
41,  42,  37^,  43  yds.  4  pes.  blue  flamiel,  51,  47,  553^,  465^  yds.  3  pes.  cashmere,  39,  41, 
42  yds.  8  pes.  Fruit  of  Loom  sheeting,  58,  60,  60,  61,  57,  63,  65,  55  yds.  7  pes.  pique 
muslin,  68,  72,  75,  70,  65,  68,  70  yds. 

Xo.  5-4. — Give  Sibley,  Lindsay  &  Curr  Co.  your  note  at  20  days  (no  interest),  $2500. 
(Enter  in  Accounts  Payable  and  Bills  Paj-able  columns  of  the  journal.) 

No.  55. — Pay  Granite  Mills,  by  check,  for  invoice  of  July  2  ist,  $904.85,  less  5I?  discount. 

Xo.  56. — Purchase  of  merchandise  from  Gimbel  Bros.     (See  instructions  for  No.  32.) 

Xo.  57. — August  21.  One  piece  of  kersey,  46^^  yds.,  received  on  the  20th  inst.  from 
Gimbel  Bros.,  is  damaged.  Return  it,  and  render  your  bill  for  the  same  at  cost  price. 
(Enter  as  in  No.  23.) 

Xo.  58. — This  check  is  from  Warren  &  Co.,  to  prepay  their  note  of  $325,  less  discount 
to  maturity.  Make  entry  in  the  Sundry  column  of  the  cash  book.  ^lark  the  note  prepaid 
in  the  bill  book.     (Ti^hii  Discou7it.) 

X'o.  59.— Salesman's  orders.     Bill  as  follows;    terms,  25^  10  days,  i^  30  days. 

Brown  &  Wilson,  Troy,  2  pes.  Talbot  flannel,  45,  42^  yds.  2  pes.  whipcord,  40^, 
43^  yds.  5  pes.  Monument  cotton,  58,  63,  65,  60,  62  yds.  6  pes.  denim,  38,  43,  37,  44, 
40,  36  yds. 

Sibley  &  Co.,  Gardner,  2^?  10  days,  li  30  days,  6  pes.  Fruit  of  Loom  sheeting,  60,  63, 
55'  58-  65,  61  yds.  2  pes.  corduroy,  40,  34^  yds.  2  pes.  black  Venetian  cloth,  38,  335^ 
yds.     50  doz.  Coates  thread. 

B.  C.  Wiley,  Waverly,  6'i  10  days,  5^/  30  days,  3  pes.  Oxford  gray  homespun,  48,  50, 
51^  yds.  4  pes.  cashmere,  36,  38^,  42,  43 ^^  yds.  7  pes.  Crown  lining,  50,  54,  58,  52, 
55.  51.  57  yds.     6  pes.  sateen,  45,  50,  49,  53,  48,  49  yds.     50  doz.  lace. 

Xo.  60. — August  22.     Check  received  for  invoice  of  July  21st,  $466.42,  less  5^. 

Xo.  61. — Pay  freight  in  cash,  $24.87. 

Xo.  62. — August  24.     Note  on  account.      (Enter  in  journal.) 

Xo.  63. — Draw  a  sight  draft  on  Brown  &  Wilson  for  invoice  of  July  15th,  $504.11. 
Indorse  the  draft  as  in  No.  2,  and  place  in  Vouchers  for  Others  or  leave  at  the  bank  for 
collection. 

Xo.  6-4. — Make  your  check  in  favor  of  Little  Falls  Woolen  Co.,  in  full  for  note  and 
interest  due  to-day.     Write  them  a  letter  and  enclose  the  check. 

Xo.  65. — Remit  Gimbel  Bros,  check  for  invoice  of  July  29th,  $1293.80,  less  5^  discount. 

Xo.  66. — August  25.  Salesman's  orders.  Carlton,  Sons  &  Co.,  Dansville,  2'b  10 
days,  I'c  30  days,  2  pes.  broadcloth,  60,  58  3-ds.  4  pes.  Creton  plaid,  37,  39^,  41,  38  yds. 
5  pes.  sateen,  47,  51,  48,  49,  46  yds.  3  pes.  black  Venetian  cloth,  48^,  35^,  34  yds. 
100  gross  buttons. 

L.  H.  Parker,  Lima,  30  days  net,  2  pes.  whipcord,  40,  42  yds.  6  pes.  Fruit  of  Loom 
sheeting,  56,  64,  58,  62,  59,  62  yds.  5  pes.  Monument  cotton,  58,  59,  57,  62,  60  yds,  8 
pes.  pique  muslin,  70,  72,  65,  75,  69,  73,  66,  68  yds.     i  piece  broadcloth,  60  yds. 

W.  B.  Snow,  Akron,  2<  10  days,  i^  30  days,   6  pes.  wash  silk,  47%^,  48,  46 J^,  49, 
53^,  55  yds.     3  pes.  surah  silk,  471^,  493/,  52  yds.     3  pes.  corduroy,  36,  38,  37  yds.     6 
pes.  Crown  lining,  52,  56%,  55  J^,  57,  50,  54  yds. 
Com. — 12 


178 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Levy  &  Garson,  Somersworth,  6''  lo  days,  s^r  30  days,  90  gross  buttons.  40  doz. 
thread.     2  pes.  plain  Frei.^^x  ^jopiin,  48,  42  j^ds.      i  piece  kersey,  40  yds. 

No.  <>7. — Invoice  of  merchandise  purchased  of  Sible5^  Lindsay  &  Curr  Co. 

No.  HH. — August  26.  Discount  Chase's  note  received  on  the  24th  inst.  Indorse  tlie 
note  in  full  to  the  Commercial  Bank,  and  leave  it  at  the  bank,  having  the  net  proceeds 
credited  in  your  bank  pass  book.  Add  the  proceeds  to  your  bank  balance  on  the  stub  of 
the  check  book.      (Behit  Discount) 

Xo.  GO.— Remit  Gimbel  Bros,  your  note  at  30  daj^s  for  $2000,  to  apply  on  accomit. 
(No  interest.) 

Xo.  70. — Purchase  of  merchandise  from  Little  Falls  Woolen  Co. 

Xo.  71. — August  28.  Receive  credit  at  the  bank  for  draft  on  Brown  &  Wilson, 
$504.11,  left  for  collection  Aug.  24tli.     Collection  charges,  50^^ 

Add  the  proceeds  to  your  bank  balance.  Credit  Brown  &  Wilson;  debit  Collection  aiid 
Exchange . 

Xo.  72. — Fill  the  following  telephone  order  received  from  Harris  &  Smith,  City. 
Terms,  2^  10  days,  \<  30  days.  4  pes.  Talbot  flannel,  44,  45^,  45,  43  yds.  3  pes. 
velveteen,  36,  32,  38  J^  yds.  2  pes.  unbleached  cotton,  60,  62  yds.  3  pes.  Fruit  of  Loom 
sheeting,  61,  60^  6o>^  3'ds.     25  gross  smoked  pearl  buttons. 

Xo.  7.3. — August  30.  Carlton,  Sons  &  Co.,  Dansville,  return,  for  credit,  the  goods 
as  per  their  bill. 

When  returned  goods  have  been  duly  accepted,  it  is  customary  to  send  what  is  called 
a  credit  memorandum.  Send  Carlton,  Sons  &  Co.  a  credit  memorandum  for  these  goods. 
(Enter  in  General  and  Accounts  Receivable  columns  of  journal.) 

Form  of  Credit  Memorandum. 

New  York,  Aug.   19,    1900. 
Memorandum  of  Amount  placed  to  the 


CREDIT 


Of    Taylor,    Wood   &   Co. 


By  The  H.  B.  CLAFLIN  CO. 


pes.     Blk.     Cashmere,     90    yds.      .  75 


67 


50 


A  credit  memorcinduin  is  usually  printed  in  red. 

No.  74. — This  check  is  received  on  account. 

No.  75. — Cash  sale.  W.  \\.  Dennis  &  Co.,  City  (check),  i  piece  storm  serge,  48  yds. 
4  pes.  velveteen,  38,  36,  37,  39  yds.  2  pes.  French  crcpon,  40,  3^  yds.  2  pes.  cashmere, 
41,  37  yds.      I  piece  surah  silk,  4S  yds.     3  i-)cs.  wash  silk,  49,  56,  45  yds. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


179 


No.  70.— Deposit  all  checks.     Collection,  $1.50. 

No.  77. — August  31.     Pay  freight,  $12.82,  by  check. 

No.  78. — Pay  cash  for  horse-shoeing  and  repairs  on  wagon,  $5.43.      (Debit  Expense. ~) 

No.  79. — Pay  Judson'  s  salary  for  August,  $1 50,  by  check.    (  Debit  Traveling  Expetises. ) 

No.  80. — Pay  clerk  hire,  $114.50,  in  cash.     (Debit  Salaries  &  Help.) 

No.  81. — (Student)  draws  by  check  on  private  account,  $100. 


THE    BALANCE    LEDGER. 

In  this  month's  work  you  will  use  what  is  known  as  the  balance  ledger  for  the  posting 
of  accounts  receivable  and  accounts  payable.     The  following  is  a  form  of  this  ledger. 

WARNER,  Deforest  &  co., 

Amsterdam,  N.  Y. 


Date. 


Descrip- 
tion. 


July 


I 

BaL 

9 

S.  B 

14 

18 

20 

20 

21 

26 

' 

Terms. 

Fol. 

Debit. 

Balance. 

Credit. 

Date 

Fol. 

J 

I 

812 

70 

1 

'  812 

70 

July 

10 

12 

5r»'  10  ds. 

7 

215 

70 

-' 

-  215 

70 

19 

14 

2/10  Net  30 

9 

168 

70 

4 

^  210 

25 

21 

14  . 

((     ( t 

II 

415 

60 

0 

^  168 

70 

23 

16 

Net  60  ds. 

12 

388 

70 

"    415 

60 

28 

18 

2/10 

12 

412 

10 

6 

*  412 

10 

30 

18 

Cash 

i,^ 

210 

25 

?< 

Net  30  ds. 

14 

160 

40 

549 

10 

Explanation. 


c 
c 
c 
c 

Note  4  inos.  Int, 
C 


The  first  column  at  the  left  is  the  ordinary  Date  column.  The  narrow  column  follow- 
ing, marked  "  Description,"  indicates  the  book  from  which  the  posting  is  taken.  In  the 
Terms  column  following  should  be  written  the  terms  of  sale.  The  Folio  column  shows 
the  page  of  the  book  indicated  in  the  Description  column.  The  Debit  column  follows. 
In  the  center  of  the  ledger  page  is  a  column  for  balances.  Next  to  this  comes  the  Credit 
column,  followed  by  the  Date  and  Folio  columns,  and  an  Explanation  column,  which  may 
contain  the  letters  indicating  the  book  from  which  the  credit  posting  is  made;  or,  if  it  be 
a  purchase,  this  column  may  contain  the  terms,  or  in  fact  any  description  the  entry  may 
make  advisable.  The  balance  of  the  account,  when  a  trial  balance  is  taken,  should  be 
placed  in  the  Balance  column  at  the  center  of  the  page.  The  Debit  and  Credit  columns 
opposite  each  other  will  show  readily  when  any  particular  bill  has  been  paid,  and  in  case 
a  bill  is  paid  in  full,  instead  of  ruling  the  ledger  account,  it  is  better  to  write  a  small 
figure  opposite  each  of  the  accounts  which  balance  (see  model  above).  In  this  way  a 
mere  glance  at  a  ledger  account  shows  what  bills  remain  unpaid,  and  frequently  saves  a 
large  amount  of  work  in  taking  the  balance  of  that  account. 

This  form  of  ledger  is  largely  in  use  in  business  houses  which  keep  a  large  number  of 
personal  accounts,  as  it  enables  the  bookkeeper  to  make  a  statement  of  any  personal 
account  with  very  little  extra  labor. 


180  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

DIRECTIONS   FOR    POSTING. 

In  this  month's  transactions  you  have  three  ledgers — the  main  ledger,  the  sales  ledger, 
and  the  purchase  ledger.  In  the  main  ledger,  under  the  head  of  Accounts  Receivable, 
you  have  an  abstract  of  the  sales  ledger,  and  under  the  head  of  Accounts  Payable,  you 
have  an  abstract  of  the  purchase  ledger. 

POSTING   THE   JOURNAL. 

The  journal,  in  this  month's  transactions,  contains  special  columns  on  the  debit  side 
for  Accounts  Payable  and  Bills  Receivable.  Post  the  footing  of  Accounts  Payable  column 
on  the  debit  side  of  the  journal  to  the  debit  of  Accounts  Payable  in  the  main  ledger.  Post 
the  footing  of  Bills  Receivable  column  on  the  debit  side  of  the  journal  to  the  debit  of  Bills 
Receivable  in  the  main  ledger.  Check  off  each  bill  receivable  in  the  Folio  column  of  the 
journal,  as  all  these  items  are  posted  at  once  when  the  footing  of  the  column  is  carried  to 
the  debit  of  Bills  Receivable  in  the  main  ledger. 

Post  each  individual  account  on  the  debit  side  of  the  journal  to  the  person  or  firm 
named  in  the  purchase  ledger.  The  total  debit  of  accounts  in  the  purchase  ledger  will 
agree  with  the  footing  of  Accounts  Payable  column  of  the  journal. 

Post  all  accounts  found  in  the  General  column  on  the  debit  side  of  the  journal  as  in 
the  ordinary  posting  of  the  journal  in  previous  sets.  These  accounts  will  be  found  in  the 
main  ledger. 

The  credit  side  of  the  journal  contains  special  columns  for  Accounts  Receivable  and 
Bills  Payable.  The  footing  of  the  Accounts  Receivable  column  is  posted  to  the  credit  of 
Accounts  Receivable  in  the  main  ledger.  The  footing  of  the  Bills  Payable  column  is  posted 
to  the  credit  of  Bills  Payable  in  the  main  ledger.  Check  off  each  bill  payable  in  the  Folio 
column  of  the  journal,  as  all  these  items  are  posted  at  once  when  the  footing  of  the  cohnnn 
is  carried  to  the  credit  of  Bills  Payable  in  the  main  ledger. 

Post  each  individual  account  to  the  person  or  firm  named  in  the  sales  ledger.  The 
total  credit  footing  of  the  sales  ledger  will  agree  with  the  footing  of  Accounts  Receivable 
column  of  the  journal. 

The  accounts  found  in  the  General  colunni  are  posted  as  usual. 

Carry  into  the  General  column  of  your  journal  the  footings  of  Accounts  Payable  and 
Bills  Receivable  columns  on  the  debit  side,  and  foot  the  General  column.  Carry  into  the 
General  column  the  footings  of  Accounts  Receivable  and  Bills  Payable  columns  on  the 
credit  side,  and  foot  the  General  column.  The  del)it  and  credit  footings  should  ot  course 
be  alike. 

POSTING   THE    SALES    BOOK. 

Post  from  your  sales  book  all  items  sold  on  account  to  the  debit  of  the  proper  accounts 
in  the  sales  ledger.  Post  the  total  footing  of  the  last  colunni  of  the  sales  Ijook  to  the 
credit  of  Merchandise  Sales  and  to  the  debit  of  Accounts  Receivable  in  the  main  ledger. 

POSTING   1  HE   CASH    BOOK, 

The  cash  book  contains,  on  the  del)it  side,  special  columns  as  follows:  Amount  of 
Invoice,  Discount  Allowed,  Amount  Received,  Merchaiulise,  Sundry. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  181 

When  a  customer  pays  cash  on  account,  the  amount  of  the  bill  settled  is  placed 
in  the  Amoiuit  of  Invoice  column;  whatever  discount  is  allowed  upon  it  is  placed  in  the 
Discount  Allowed  column;  the  net  amount  of  the  check,  or  of  cash  received,  is  placed  in 
the  Amount  Received  column.  The  Merchandise  column  contains  all  cash  sales  of  mer- 
chandise, and  the  Sundry  column  contains  such  accounts  as  are  not  otherwise  classified. 

In  posting,  the  amounts  in  the  Amount  of  Invoice  column  are  carried  to  the  credit  of  the 
accounts  named  in  the  sales  ledger,  and  at  the  end  of  the  month  the  footing  of  this  column 
is  carried  into  the  Sundry  column  of  the  cash  book  and  posted  to  the  credit  of  Accounts 
Receivable  in  the  main  ledger. 

At  the  end  of  the  month  the  footing  of  the  Discount  Allowed  column  is  carried  to  the 
opposite  side  of  the  cash  book  into  the  Sundry  column,  and  from  that  place  it  is  posted 
to  the  debit  of  Discount  on  Sales  in  the  main  ledger. 

The  Amount  Received  column  is  not  posted,  but  should  be  footed,  and  its  footing  added 
to  the  Discount  Allowed  column  should  equal  the  footing  of  the  Amount  of  Invoice  column. 

The  footing  of  the  Merchandise  column  should  be  carried  into  the  Sundry  column  and 
posted  to  the  credit  of  Merchandise  Sales  in  the  main  ledger. 

The  amounts  in  the  Sundry  column  should  be  posted  in  the  usual  manner  to  the 
accounts  named  in  the  main  ledger. 

The  credit  side  of  the  cash  book  contains  special  columns  as  follows:  Amount  of 
Invoice,  Discount  Allowed,  Amount  Paid,  Collection  and  Exchange,  Sundry. 

When  you  pay  for  a  purchase,  the  face  of  the  bill  is  placed  in  the  Amount  of  Invoice 
column;  whatever  discount  was  allowed  you  in  the  Discount  Allowed  column;  the  net 
amount  of  the  check  in  the  Amount  Paid  column.  All  other. amounts,  except  Col- 
lection and  Exchange,  are  placed  in  the  Sundry  column. 

In  posting,  each  amount  in  the  Amount  of  Invoice  column  is  carried  to  the  debit  of 
the  account  named  in  the  purchase  ledger,  and  at  the  end  of  the  month  the  total  footing 
of  the  Amount  of  Invoice  column  is  carried  into  the  Sundry  column,  and  thence  posted  to 
the  debit  of  Accounts  Paj-able  in  the  main  ledger. 

The  footing  of  the  Discount  Allowed  column  is  carried  to  the  opposite  side  of  the 
cash  book  into  the  Sundry  column,  and  thence  posted  to  the  credit  of  Discount  on  Pur- 
chases in  the  main  ledger. 

The  footing  of  the  Amount  Paid  column  is  not  to  be  posted,  but  should  be  added  to 
the  footing  of  the  Discount  Allowed  column,  and  their  sum  should  equal  the  footing  of 
the  Amount  of  Invoice  column. 

The  Collection  and  Exchange  column  should  be  footed,  the  amount  carried  into  the 
Sundry  column,  and  thence  posted  to  Collection  and  Exchange  in  the  main  ledger. 

The  items  in  the  Sundry  column  should  be  posted  to  the  accounts  named  in  the  main 
ledger.. 

■    POSTING   THE    INVOICE    BOOK. 

The  invoice  book  should  be  posted  as  usual,  the  items  being  carried  to  the  credit  of 
the  accounts  named  in  the  purchase  ledger,  and  the  total  footing  of  the  book  carried  to  the 
debit  of  Merchandise  Purchases  and  to  the  credit  of  Accounts  Payable  in  the  main  ledger. 

Having  posted  5'our  books,  check  back  each  item,  and  be  sure  that  you  have  posted 
the  footings  of  the  special  columns  in  the  journal  to  the  accounts  named  in  the  main  ledger. 
See  that  you  have  posted  the  special  columns  of  the  cash  book  to  the  accounts  named  in 


182 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Inventories,  August  31,  190-. 
Resources. 


Merchandise. 

47 

pes.  Amoskea<;  Denim, 

1919' 

yds. 

.10 

24 

"    Black  Venetian, 

860' 

1. 10 

1 

28 

"    Blue  Flannel, 

1403' 

.20 

1 

15 

"     Broadcloth, 

904 

3-25 

16 

"    Creton  Plaid, 

66o^ 

.11 

174 

"    Crown  Lining, 

9425- 

.06 

24 

"    Corduroy, 

856' 

.60 

34 

"    Cashmere, 

1410 

.48 

235 

doz.  Coates  Thread, 

.37  K 

25 

pes.  Duchess  Satin, 

1255 

1.65 

266 

"    F.  of  L.  Sheeting, 

15954' 

.07 

16 

"    French  Crepon, 

598 

1.50 

33 

"    54-in.  Kersey, 

1519' 

•99  ^ 

125 

"    Monument  Cotton, 

7482-^ 

.05^ 

17 

"    Ox.  Gray  Homespun, 

855' 

.90 

37 

"    Plain  French  Poplin, 

1665^ 

.92 

179 

"    Pique  Muslin, 

12529 

.12'^ 

82 

"    Sateen, 

4027 

.08 

625 

gross  Smoked  Pearl  Buttons, 

• 

•50 

41 

pes.  Surah  Silk, 

2105 

•44 

34 

"     Storm  Serge, 

1570 

.60 

90 

"    Talbot  Flannel, 

3979' 

•23 

540 

doz.  Torchon  Lace, 

.60 

32 

pes.  Velveteen, 

1180^ 

.24 

31 

"    Whipcord, 

1310' 

.80 

76 

"    Vv'ashSilk, 

Furniture  &  fix.,  cost, 
Depreciation, 

Horses,  wagons  and  harnesses,  cost, 

3954' 

•45 

2600 
26 

750 

2574 

Depreciation, 

7 

50 

742 

50 

Insurance, 

267 

5-^ 

Real  estate, 

12250 

Wamsutta  Mills  Stock, 

1 

1153 

Rent  due  on  flat, 

100 

Interest  (accrued), 

12 

75 

Liability. 

Interest  (accrued). 

171 

67 

the  main  ledger,  and  that  each  item  in  the  Sundry  cohimn  has  been  posted  to  the  account 
named.  See  that  the  footing  of  the  last  column  of  the  sales  book  has  been  carried  to  the 
credit  of  Merchandise  Sales  and  to  the  debit  of  Accounts  Receivalile  in  the  main  ledger, 
and  that  the  footing  of  the  invoice  lx)ok  has  been  carried  to  thedel)it  of  Merchandise  Pur- 
chases and  to  the  credit  of  Accounts  Payable  in  the  main  ledger. 

Foot  your  cash  lx)ok  and  write  the  balance,  in  red  ink,  on  the  credit  side.  See  that 
the  amount  in  the  bank  agrees  with  your  check  book  balance,  and  the  amount  in  the  safe 
agrees  with  the  cash  in  your  Cash  Drawer. 

Make  a  statement  of  the  balances  of  accounts  in  the  sales  ledger,  and  see  (hat  the  footing 
is  the  same  as  the  Ijalance  of  Accounts  Receivable  in  the  main  leilger. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


183 


Make  a  statement  of  the  balances  in  the  purchase  ledger,  and  see  that  the  footing  is 
the  same  as  the  balance  of  Accounts  Payable  in  the  main  ledger. 

Take  a  trial  balance  of  the  main  ledger,  and  in  this  trial  balance  include  the  balance  of 
cash,  as  shown  by  your  cash  book. 

Present  your  trial  balance  to  your  teacher  for  examination. 

It  is  desired  to  make  a  statement  of  losses  and  gains,  in  order  to  determine  whether 
the  business  is  being  so  conducted  as  to  yield  a  satisfactory  profit. 

The  inventory  of  unsold  merchandise  has  been  taken,  and  it  is  found  that  you  have  on 
hand  the  list  of  merchandise  given  on  page  182. 

The  furniture  and  fixtures  of  the  business,  which  cost  $2600,  have  depreciated  i^  in 
value. 

The  horses,  wagons  and  harnesses,  w^hich  cost  $750,  show  an  equal  depreciation. 

The  unexpired  policies  of  insurance  are  estimated  to  be  worth  $267.50,  while  real  estate 
has  advanced  in  value,  so  that  it  is  estimated  to  be  worth  $12250. 

Wamsutta  Mills  stock  is  now  selling  at  1 15. 

There  is  due  for  rent  on  your  real  estate  $100. 

Interest  accrued  on  bills  receivable,  $12.75.     Interest  due  on  bills  paj^able,  $171.67. 

Find  the  value  of  your  unsold  merchandise  and  all  other  property,  and  make  a  state- 
ment of  losses  and  gains  according  to  the  following  model. 

In  the  third  section  of  the  model  statement  of  losses  and  gains,  after  the  gain  from 
business  has  been  shown  as  usual  in  the  first  two  sections,  we  have  on  the  credit  side  the 
items  of  real  estate,  Wamsutta  Mills  stock,  and  rent,  which  have  no  connection  with  the 
dry  goods  business.  Add  the  gain  from  these  items  to  the  gain  from  the  business  brought 
down,  and  close  this  section  of  the  loss  and  gain  statement,  by  writing,  in  red  ink,  on  the 
opposite  side:  Total  gain  from  partnership  carried  down.  Foot  and  rule  this  section  and 
bring  down  the  total  gain  from  partnership  on  the  opposite  side. 

In  the  fourth  section  of  this  statement  we  have  the  items  of  interest  and  salaries  on 
the  debit  side.     The  interest  due  the  partners  is  found  as  follows: 

H.  W.  Taylor  invested,  August  ist,  $15800,  and  is  entitled  to  interest  on  this  amount 
for  31  days,  $8x.x3.  He  also  has  in  the  business  a  private  balance  of  $400.  The  interest 
on  this  amount  for  31  days  is  $2.x7,  making  a  total  credit  interest  of  $8x.xo.  Against 
this  amount  Taylor  is  charged  with  interest  on  a  withdrawal  of  $200,  under  date  of  August 
6th.  The  interest  on  $200  for  25  days,  the  time  he  had  it  out  from  the  business,  is  8x52^, 
and  this  amount  deducted  from  $83.70  leaves  a  credit  interest  balance  of  $8x.x7,  which 
you  will  write  opposite  the  name  of  H.  W.  Taylor  in  the  third  section  of  the  loss  and  gain 
statement. 

The  following  shows  the  statement  of  H.  W.  Taylor's  interest  account. 

H.  W.  Taylor. 


Interest  on  withdrawal  of  Aug.  6,  |2oo, 
25  days, 

*  Balance,  Cr., 


*  To  be  wTitten  in  red  ink. 


83 

82|87 

83    70 

Interest,  31  days,  on  investment,  $15800, 
Interest,  31  days,  on  private  "r,  $400, 


81 
2 


83 


63 
07^ 
70 


184 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Statement  of  Losses  and 


Mdse.  on  hand  at  close  of  July, 
"      purchased  during  August, 

Less  goods  returned, 

Freight, 

Gain  on  mdse.  carried  down. 


Interest  due  on  bills  payable, 
"  "         "         receivable, 

Less  credit  balance  of  Int.  o/c  in  ledger, 

Discount, 

Salaries  and  Help, 

Discount  on  Sales, 

Traveling  Expenses, 

Expense, 

Collection  &  Exchange, 

Insurance,  cost, 

"  unexpired, 

Depreciation  as  under: 

Furniture, 

Horses,  wagons  and  harnesses. 

Gain  from  business  carried  down, 


165.50 
15.20 


Total  gain  of  partnership  carried  down, 


Interest  due  partners  as  under : 

A.  B.  Dane, 

C.  E.  Freedman, 

G.  H.  Irving, 

Salaries  due  partners  as  under: 

A.  B.  Dane, 

C.  E.  Freedman, 

G.  H.  Irving, 

Each  partner's  net  gain  as  under: 

A.  B.  Dane, 

C.  E.  Freedman, 

G.  H.  Irving, 


22480 
3200 


25680 
225 


150 
112 


240 
220 


72 

65 
8 


125 

150 

175 

264 

78 

264 

77 

264 

77 

00 

75 


30 
20 


30 

20 
10 


25454     25 


125 
1950 


27530 


75 
12 

12 


38    10 

12  1  40 

175' 
210    50 

3251 
329   45 
7   45 


20 


25 
7 
1089   92 


2239  ;  82 


1389 


1389 


145 


450 


794 


1389 


92 
92 


60 


32 
92 


*To  be  written  in  red  ink. 

C.  F.  Wood  invested  $23911.94.  This  amount  has  been  in  llie  l)nsiness  31  daj'.-^,  and 
he  is  entitled  to  31  days'  interest,  $ixx.x5.  He  also  had  in  the  bnsiness  a  balance  of 
$550  due  him  on  his  private  account,  which  is  entitled  to  interest  for  31  days,  amoiniting 
to  $2.x4,  making-  a  total  interest  credit  due  C.  F.  Wood  of  $i2x.x9. 

On  August  14th,  Wood  drew  from  the  business  $225,  and  he  is  charged  with  interest  on 
this  amount  for  the  time  he  took  it  from  the  business,  or  17  days,  which  is  6x'/'.  Deducting 
this  amount  from  $126.39,  C.  F.  Wood's  interest  credit,  we  have  $i2x.x5,  the  lialance  of 
interest  due  C.  F.  Wood.  Write  this  amoiuit  in  the  third  section  of  the  loss  and  gain 
statement  against  the  name  o'^  C.  F.  Wood. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


185 


Gains,  August  31,   190-. 


Mdse.  sales  during  August, 
Less  goods  returned, 

Mdse.  on  hand,  a:j  per  inventory, 


Gain  on  mdse.  brought  down, 
Discount  on  purchases, 


Gain  from  business  brought  down. 
Real  Estate, 
Wamsutta  Mills  Stock, 
Rent, 


Total  gain  from  partnership  brought  down. 


increase  in  value  of  flat, 
due  from  flat. 


The  following  shows  the  statement  of  C.  F.  Wood's  interest  account. 

C.  F.  Wood. 


Interest  on  withdrawal,  Aug.  14,  $225, 
17  days, 

*  Balance,  Cr., 


125 
126 


7560 

240 

1 

80 

So 

1 

i 

7320 

20210 


27530 


12 


Interest,  31  days,  on  investment, 
64!      $23911.94, 
75    Interest,  31  days,  on  private  c/c,  $550, 

39 


1950 
289 


2239 


1089 
150 

50 
100 


1389 


1389 


1389 


12 

12 
70 


82 
92 

92^ 
92 


92 


123 

2 

55 
84 

126 

39 

186 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


You  invested  $2500,  and  should  be  credited  with  31  days'  interest  on  this  amount. 
$ix.x2;'  but  you  drew  from  the  business,  August  i8th,  $100,  and  the  interest  on  this 
amount  for  13  days  is  2x^-,  which  deducted  from  $12.92  leaves  you  a  credit  balance  of 
interest  amounting  to  $ix.xo,  which  you  wdll  place  opposite  your  own  name  in  the  third 
section  of  the  loss  and  gain  statement. 

The  following  shows  the  statement  of  your  own  interest  account. 


Interest  on  withdrawal  of  Aug.  iS,  |ico, 
13  days, 

*  Balance,  Cr., 


*To  be  written  in  red  ink. 


Student. 


12 

22 
92 

12 

Interest,  31  ds.,on  investment,  $2500.00, 


12 


12 


92 


92 


CLOSING   THE    LOSS   AND   GAIN    ACCOUNTS. 

Close  all  accounts  which  indicate  losses  or  gains  in  the  main  ledger,  bj'  writing,  in  red 
ink.  Loss  or  Gain  on  the  smaller  side,  and  transfer  to  the  Loss  and  Gain  account.  Close 
the  Toss  and  Gain  account,  by  writing  Balance  carried  down,  in  red  ink,  on  the  smaller 
side.  Rule  and  foot  the  account.  Transfer  the  balance  to  the  opposite  side  of  the  Loss 
and  Gain  account,  writing  Brought  down  in  the  explanation  colmnn. 

On  the  debit  side  of  the  Loss  and  Gain  account  wTite,  in  red  ink,  H.  \V.  Taylor's 
interest,  C.  F.  Wood's  interest,  and  your  own  interest,  taking  the  amounts  from  the 
fourth  section  of  the  statement  of  losses  and  gains.  Also  write,  in  red  ink,  H.  W.  Tay- 
lor's salary,  C.  F.  Wood's  salary,  and  your  own  salar^^  taking  the  amoun,ts  from  the 
fourth  section  of  the  statement  of  losses  and  gains.  Also  in  red  ink,  H.  W.  Taylor's 
gain,  C.  F.  Wood's  gain,  and  your  own  gain,  taking  the  amounts  from  the  fourth  section 
of  the  loss  and  gain  statement.     This  should  close  the  Loss  and  Gain  account. 

Transfer  the  interest,  salary,  and  loss  and  gain  of  each  partner  to  his  pri\-ate  account 
in  the  main  ledger,  writing  each  item  in  black  ink.  Close  these  private  accounts,  by 
writing  Balance,  in  red  ink,  on  the  debit  side.  Foot,  rule,  and  bring  down  each  balance 
on  the  opposite  side  of  the  account. 

Present  your  books  to  your  teacher  for  inspection. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  187 

WORK   FOR  THE   STUDENT. 
September  i,   190-. 

No.  82. — Sept.  i.  This  check  is  in  payment  of  note  dated  June  ist,  with  interest, 
(see  bill  book). 

Take  the  note  from  your  Cash  Drawer,  and  if  the  interest  is  correct,  mark  the  note 
paid,  and  place  it  in  Vouchers  for  Others.     (Enter  as  in  No.  30.) 

No.  83. — Salesman's  orders.     Jas.  H.  Wood  &  Son,  Newton,  2'i  10  ds.,  i5«  30  ds., 

6  pes.  F.  of  L.  sheeting,  58,  65,  61,  57,  59,  63^  yds.     3  pes.  corduroy,  39,  36,  2>Wx  yds. 

7  pes.  pique  muslin,  72,  69,  71,  75,  65,  68,  70  yds.     4  pes.  blue  flannel,  48^,  50,  52,  51 
yds.     50  doz.  lace,      i  piece  whipcord,  42  yds. 

Thompson  &  Bulkeley,  Easton,  6^  10  ds.,  5^  30  ds.,  3  pes.  black  Venetian,  37,  40, 
36  yds.  8  pes.  Am.  denim,  40,  44,  37,  39,  42,  45,  35,  46  yds.  3  pes.  kersey,  44,  \bVx, 
45%  yds.  4  pes.  French  crepon,  36,  40,  42,  38  yds.  5  pes.  blue  flannel,  55,  46,  48,  51, 
47  yds.     6  pes.  wash  silk,  51^2,  5o3^,  46 J^,  45/^,  54,  53  yds.     50  doz.  C.  thread. 

Sibley  &  Co.,  Gardner,  2'<'  10  ds.,  li  30  ds.,  4  pes.  Ox.  gray  homespun,  48,  47,  55, 
503^  yds.  8  pes.  unb.  cotton,  60,  65,  57,  58,  62,  64,  57,  61  yds.  7  pes.  C.  lining,  52,  56, 
55.  53 >  54)  60,  50  yds.  2  pes.  Duchess  satin,  48,  58^  yds.  50  gross  S.  P.  buttons.  25 
doz.  lace.     5  pes.  surah  silk,  51,  53^.  45.  52,  51 J^  yds. 

No.  84. — Sept.  i.  Send  Judson,  the  traveling  salesman,  as  per  his  request,  check 
for  $75  for  traveling  expenses. 

No.  85. — Sept.  2.  Received  cash  for  rent  of  flat,  ^74  Center  St.,  August  and  Sep- 
tember, $200.     (Credit  J^e?it) 

No.  86. — Check  received  from  Levy  &  Garson  for  invoice  of  August  25th,  less  6'i. 

No.  87. — Invoice  of  merchandise  purchased  from  Burke,  FitzSimons,  Hone  &  Co. 

No.  88. — Pay  invoice  Burke,  FitzSimons,  Hone  &  Co.,  due  to-day,  as  follows:  Deduct 
from  the  amount  of  the  invoice  the  charge  for  goods  returned  on  Aug.  nth,  as  per  ledger, 
and  from  this  amount  deduct  ifo,  as  per  terms  of  bill.     Write  a  check  for  the  net  amount. 

No.  89. — Sept.  3.  Ingham  &  Case  owe  a  small  balance  which  has  been  running  a 
long  time,  and  it  is  not  advisable  to  sell  them  more  goods  on  account.  Bill  the  order  as 
follows:  3  pes.  black  Venetian,  39^,  36%,  36  yds.  50  gross  buttons.  2  pes.  broad- 
cloth, 54,  58  3'ds.      I  piece  plain  French  poplin,  50  yds. 

Prepare  bill  of  lading,  the  box  weighing  175  lbs.  when  ready  for  shipment,  and  have 
the  freight  agent  sign  it.  Make  a  sight  draft,  allowing  6;^  discount  from  the  amount  of  the 
invoice.  Deduct  the  discount  on  the  invoice,  and  enter  the  net  amount  only  in  the  sales 
book.     Send  the  draft  and  bill  of  lading  to  Union  National  Bank,  Elmira,  for  collection. 

No.  90. — Bill  this  order  as  follows;  terms,  30  days  net,  2  pes.  kersey,  45,  55  yds.  3 
pes.  storm  serge,  55,  45,  50  yds.  6  pes.  velveteen,  40,  38,  42,  39,  45,  44  yds.  3  pes.  surah 
silk,  60,  41,  49  yds.     5  pes.  wash  silk,  52,  48^,  47^,  49/^,  50^  yds.      100  doz.  thread. 

No.  91. — Check  to  apply  on  account. 

No.  92. — Sept  5.  Cash  sale.  Weston  &  Hill,  City,  (check)  3  pes.  cashmere,  42, 
37.  39  yds.  40  doz.  torchon  lace.  3  pes.  French  crepon,  35,  38,  45  yds.  i  piece  whip- 
cord, 40  yds. 

No.  93. — Deposit  all  checks.     Bank  charges  for  collection,  75^/. 


188  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

No.  f)4. — Bill  this  order  as  follows;  terms,  6^?  lo  ds.,  5^?  30  ds.  i  piece  kersey,  40  yds. 
2  pes.  black  Venetian,  37,  33  37ds.      i  piece  broadcloth,  70  yds.     40  doz.  thread. 

Xo.  9,1. — Sept.  6.     Purchase  of  merchandise  from  Burke,  FitzSimons,  Hone  &  Co. 

No.  9(>. — Pay  Little  Falls  Woolen  Co.,  by  check,  for  invoice  of  Aug.  12th,  $163.22, 
less  i^. 

No.  97. — This  check  is  on  account. 

No.  98. — Sept.  7.     Check  in  full  for  invoice  of  July  25th. 

No.  99. — Salesman's  orders.  B.  C.  Wiley,  Waverly,  2'^  10  ds.,  I'c  30 ds.,  5  pes.  wash 
silk,  45,  53,  491^,  541^,  50  yds.  6  pes.  sateen,  45,  49,  50^,  47^,  48,  47  yds.  2  pes. 
corduroy,  35,  40  yds.  5  pes.  C.  lining,  56,  60,  51,  53,  50  yds.  2  pes.  black  Venetian, 
35 >  38^  yds.      I  piece  broadcloth,  64  j'ds.     4  pes.  Talbot  flannel,  40,  48,  44,  43^  yds. 

Carlton,  Sons  &  Co.,  Dansville,  die  10  ds.,  5^^  30  ds.,  8  pes.  F.  of  ly.  sheeting,  62,  65, 
68,  55,  58,  53,  60,  62  yds.  7  pes.  M.  cotton,  65,  58,  55,  63,  59,  60,  50  yds.  3  pes.  Talbot 
flannel,  421^,  45^,  43  yds.  8  pes.  C.  lining,  49,  50,  60,  54,  53,  51,  55,  57  yds.  5  pes. 
pique  muslin,  75,  72,  68,  66,  71  yds.  6  pes.  Am.  denim,  41,  43,  38,  45,  35,  50  yds.  2 
pes.  blue  flannel,  48,  52  yds.     4  pes.  velveteen,  37,  39,  36,  35  yds. 

Iv.  H.  Parker,  lyima,  dfc  10  ds.,  5,^  30  ds.,  3  pes.  storm  serge,  44,  47^,  48^  yds.  5 
pes.  velveteen,  39,  36^,  38^,  40,  30^  yds.  4  pes.  kersey,  48,  44,  45,  465^  yds.  3  pes. 
surah  silk,  45,  54,  41  yds.     50  doz.  Coates  thread. 

No.  100. — Return  to  Burke,  FitzSimons,  Hone  &  Co.,  Boston,  i  piece  broadcloth, 
62^  yds.,  I  piece  Oxford  gray  homespun,  51  yds.,  received  on  last  invoice,  as  they  are 
somewhat  damaged.     Bill  the  goods  at  cost  price,  and  charge  in  the  journal. 

No.  101. — Check  for  note  due  to-day.      (See  No.  82.) 

No.  1 02. — Sept.  8.    Invoice  of  merchandise  purchased  from  Sible}^  Lindsay  &  Curr  Co. 

No.  10;5. — Write  check,  favor  of  Sibley,  Lindsay  &  Curr  Co.,  for  note  due  to-morrow. 
Take  the  note  from  Bills  Payable  File  and  mark  it  paid. 

No.  104. — Sept.  9.     Mr.  Taylor  draws  $200  from  the  business  by  check. 

No.  105. — Note  to  apply  on  account. 

No.  10(>. — Received  notice  from  your  bank  that  the  draft  of  3d  inst.  on  Ingham  & 
Case  has  been  paid.  Collection,  70'/.  (Do  not  forget  to  debit  Collection  &  Exchange  for 
collection.) 

No.  107. — Sept.  10.  L.  H.  Parke*r,  Lima,  returns  for  credit,  by  agreement  at  time 
of  order,  the  three  pieces  of  storm  serge  and  the  three  pieces  of  surah  silk  sold  him  on 
the  7th  inst. 

Send  L.  H.  Parker  a  credit  memorandum  for  the  amount.     Kntcr  in  the  journal. 

No.  1<)S. — Mr.  Wood  draws,  by  check,  on  private  account,  $250. 

No.  109. — Sept.  12.  Cash  sales.  T.  D.  Winch,  City,  2  pes.  Duchess  satin,  49,  53 
yds.      I  piece  cashmere,  40  yds. 

Allen  &  Co.,  City,  2  pes.  Ox.  gray  homespun,  47^,  54 >^  yds.  i  piece  French  crepon, 
40  yds. 

No.  1  10. — Deposit  $300  currency  and  all  checks.     Collection  charges,  $1.25. 

No.  1  1  1. — In  reply  to  a  letter  from  Sibley,  Lindsay  &  Ciur  Co.,  asking  for  a  settle- 
ment of  their  invoice  of  July  31st,  make  out  a  clicck  for  the  amount,  $4484.23,  and  mail 
it  to  them. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  189 

No.  112. — Ingham  &  Case  have  paid  no  attention  to  letters  from  Mr.  Taylor  regarding 
the  settlement  of  their  account. 

You  will  now  make  a  sight  draft  on  Ingham  &  Case  for  $66.35.  Leave  it  at  the 
Commercial  Bank  for  collection.  Remember  to  indorse  the  draft  properly.  Write  in 
pencil,  under  their  account  in  the  ledger,  Sight  draft,  Sept.  12. 

No.  113. — Sept.  13.     Check  for  invoice  of  Sept.  5th,  less  6^. 

No.  114. — Pay  cash  for  stamps  and  office  supplies,  $10.00. 

No.  115. — Check  to  apply  on  account. 

No.  116. — Sept.  14.     Draw  on  your  own  private  account,  $150.00,  by  check. 

No.  117. — Purchase  of  merchandise  from  Gimbel  Bros. 

No.  118. — Salesman's  orders.  J.  G.  Smith,  Ottawa,  6f^  10  ds.,  5,^  30  ds.,  5  pes.  surah 
silk,  50,  60,  46,  48,  40  yds.  5  pes.  wash  silk,  60,  45,  49,  48,  52  yds.  3  pes.  Duchess 
satin,  47,  51,  52  yds.  7  pes.  velveteen,  48,  36,  29,  33,  38,  37,  33  yds.  5  pes.  storm 
serge,  50,  49,  45,  44,  56  yds.     3  pes.  Ox.  gray  homespun,  44,  52,  54  yds. 

Lewis  \V.  Chase,  Jackson,  2^0  10  ds.,  i^  30  ds.,  5  pes.  Creton  plaid,  36,  42,  44,  41,  39 
yds.  8  pes.  M.  cotton,  60,  62,  55,  65,  68,  49,  70,  53  yds.  7  pes.  F.  of  D.  sheeting, 
62,  64,  59,  57,  65,  55,  58  yds.  4  pes.  sateen,  46,  52,  50,  48  yds.  3  pes.  Talbot  flannel, 
48,  40,  45  yds.  8  pes.  C.  lining,  54,  51,  60,  50,  55,  53,  52,  56  yds.  4  pes.  French  crepon, 
42,  36,  38,  37  yds.     50  doz.  Coates  thread. 

Levy  &  Garson,  Somersworth,  2i  10  ds.,  i^  30  ds.,  3  pes.  plain  French  poplin,  48,  53, 
49  yds.  5  pes.  Talbot  flannel,  40,  46,  44,  50,  42  yds.  2  pes.  whipcord,  42,  38  yds.  6  pes. 
corduroy,  39,  32,  37,  40,  33,  41  yds.     80  doz.  torchon  lace.      150  gross  S.  P.  buttons. 

No.  119. — Pay  Granite  Mills,  by  check,  for  invoice  due  to-day,  less  i^. 

No.  120. — Return  to  Gimbel  Bros,  i  piece,  32  yds.,  French  crepon.  (Enter  in  journal, 
billing  at  cost  price.) 

No.  121. — Sept.  16.  Cash  sales.  E.  H.  Marcy  &  Co.,  2  pes.  Duchess  satin,  47 5^, 
52^  yds.     2  pes.  Ox.  gray  homespun,  47,  53  yds. 

Wallace  Bros,  (check),  i  piece  whipcord,  50  yds.  i  piece  surah  silk,  48  yds.  i  piece 
storm  serge,  48  yds.     50  doz.  torchon  lace. 

No.  122. — Pay  cash,  salaries  and  help,  $75. 

No.  123. — Paj'  freight  in  cash,  $30. 

No.  1 24. — Sept.  i  7 .    This  check  is  for  note  and  interest  due  to-day.     (Credit  Interest. ) 

No.  125. — Deposit  all  checks.     Collection,  $2.00. 

No.  126. — The  bank  informed  you,  at  time  of  above  deposit,  that  your  draft  of  the 
12th  inst.  on  Ingham  &  Case  has  been  returned  unpaid.     No  reason  assigned. 

Write  in  lead-pencil,  under  their  account  in  your  ledger,  g>  7,  draft  returned. 

No.  127. — Sept.  19.     Invoice  of  merchandise  purchased  of  Little  Falls  Woolen  Co. 

No.  128. — Pay  rent  for  September,  $300,  by  check. 

No.  129. — Sept.  20.  You  have  outstanding  an  interest-bearing  note,  due  to-day, 
and  the  bank  has  agreed  to  renew  one-half  of  the  amount  for  10  days. 

Make  your  note  at  10  days  (with  interest),  in  favor  of  the  Commercial  Bank,  $5000. 
Receive  credit  for  the  face  of  the  note.  Enter  in  the  bill  book,  and  add  to  yoiu:  deposit 
on  stub  of  the  check  book. 


190  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

No.  130. — Write  a  check,  in  favor  of  the  Commercial  Bank,  in  full  for  the  old  note 
as  above  and  four  months'  interest.  This  is  your  first  "  renewal,"  and  you  should  study 
the  transaction  carefully. 

No.  J  31. — Check  to  apply  on  account. 

No.  132. — Sept.  21.     Note  received  on  account. 

No.  133. — Discount  the  note  received  from  L.  \V.  Chase,  and  receive  credit  for  the 
proceeds. 

No.  134. — Salesman's  orders.  James  H.  Wood  &  Son,  Newton,  2^?  lo  ds.,  i^,  30  ds., 
3  pes.  surah  silk,  48,  51,  53  yds.  25  doz.  Coates  thread,  i  piece  plain  French  poplin, 
45  yds-  5  pes.  C.  Hning,  50,  60,  54,  51,  53  yds.  2  pes.  Talbot  flannel,  44,  45  yds.  2 
pes.  corduro}',  37,  38  yds. 

Thompson  &  Bulkeley,  Kaston,  ^''<  10  ds.,  ^  30  ds.,  4  pes.  blue  flannel,  45,  54,  50, 
51  yds.  2  pes.  Creton  plaid,  44,  36  yds.  5  pes.  P.  F.  poplin,  40,  48,  50,  47,  40  yds.  6 
pes.  pique  muslin,  68,  75,  67,  70,  74,  66  yds.  3  pes.  sateen,  49,  50,  47  yds.  2  pes. 
velveteen,  37,  36  yds. 

Sibley  &  Co.,  Gardner,  i  piece  broadcloth,  60  yds.  5  pes.  M.  cotton,  55,  58,  65, 
62,  60  3'ds.  2  pes.  black  Venetian,  36,  34  j^ds.  6  pes.  pique  muslin,  68,  75,  70,  73,  69, 
67  yds.     5  pes.  sateen,  48,  51,  49,  52,  50  3^ds.      i  piece  storm  serge,  45  yds. 

Brown  &  Wilson,  Troy,  7  pes.  Am.  denim,  35,  38,  42,  45,  37,  43,  40  3^ds.  3  pes.  cash- 
mere, 44,  36,  42  yds.  2  pes.  Duchess  satin,  49,  52  3'ds.  6  pes.  F.  of  L.  sheeting,  58,  55, 
70,  52,  56,  68  yds.     5  pes.  C.  hning,  52,  55,  54,  50,  56  yds.     50  gross  S.  P.  buttons. 

No.  135. — Sept.  22.     Check  received  on  account. 

No.  13(>. — Deposit  the  two  checks  on  hand.     Collection,  75^/. 

No.  137. — Sept.  23.     Mr.  Taylor  draws  cash,  $50,  on  private  account. 

No.  138. — Check  to  apply  on  account. 

No.  13J). — Merchandise  purchased  of  Sibley,  lyindsay  &  Curr  Co. 

No.  140. — Invoice  of  mdse.  purchased  of  Burke,  FitzSimons,  Hone  &  Co. 

No.  141. — Sept.  24.     Pay  freight  in  cash,  $75.28. 

No.  143. — Check  for  invoice  of  14th  inst.,  less  d'c  discount. 

No.  143. — Pay  Burke,  FitzSimons,  Hone  &  Co.,  by  check,  for  invoice  of  Aug.  31st., 
less  yL 

No.  144. — Sept.  26.  Bill  this  order  as  follows;  terms,  2"^  10  ds.,  I'V.  30  ds.  5  pes. 
velveteen,  37,  35,  40,  38,  36  yds.  3  pes.  A.  denim,  42,  39,  41  yds.  2  pes.  blue  flannel, 
53,  48  yds.  3  pes.  black  Venetian,  39,  35,  38  yds.  i  piece  Duchess  satin,  50  yds.  4  pes. 
pique  muslin,  68,  72,  65,  69  yds. 

No.   145. — Give  Gimbel  Bros,  cheek  for  note  due  yesterday. 

When  notes  or  other  obligations  mature  on  Sunday,  it  is  custoniar}-  to  pay  thciii  the  followim;  day. 

No.   146. — Check  in  payment  of  invoice  of  i4lh  inst.,  less  2io. 

No.  147. — Sept.  27.  Bill  this  order  as  follows;  terms,  6/  10 days,  5'r  30 days.  6  pes. 
F.  of  Iv.  sheeting,  58,  62,  65,  60,  55,  60  yds.  6  pes.  M.  cotton,  62,  5S,  65,  60,  62,  61  yds. 
2  pes.  plain  French  poplin,  45,  47  yds.  2  \>q.s.  corduroy,  35,  3S  >(ls.  100  gre)ss  S.  P. 
buttons.     50  doz.  Coates  thread.     50  doz.  torchon  lace. 

No.  148. — Check  for  $5000.  By  consent  of  the  partners,  Mr.  Ta)lor  has  arranged 
to  borrow  the  sinn  of  five  thousand  dollars  of  Mr.  Darius  D.  Miner,  giving  him  llie  note 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


191 


of   the  Company,  paj'able '  on  demand,    and  secured  by  first  mortgage  on   the  flat  at 
II74  Center  St. 

Make  a  note  favor  of  Darius  D.  Miner,  payable  on  demand,  with  interest,  6/1.  Enter 
in  cash  book  and  record  in  bill  book. 

No.  149. — Deposit  all  checks.     Collection  and  exchange,  $2.00. 

No.  150. — Sept.  28.     Pay  grain  and  feed  bills  in  cash,  $16.75. 

No.  151. — Pay  cash  for  salaries  and  help,  $100. 

No.  152. — Pay  cash  for  telephone  service,  $15. 

No.  153. — Sept.  30.     Draw  cash  for  your  own  private  use,  $40. 

No.  154. — Pay,  by  check,  note  and  interest  due  at  bank  to-day. 

No.  155. — Pay  Judson  one  month's  salary  by  check,  $150. 

Post  all  books  (see  directions,  page  180).  Check  back,  after  which  take  a  trial  balance. 
Make  a  statement  of  losses  and  gains  and  of  resources  and  liabilities  (see  models,  pages  lii^ 
and  185  and  192  and  193). 

Close  your  ledger  and  present  your  books  to  your  teacher. 

Inventories,  Sept.  30,   190-. 


Merchandise. 
23  pes.  Amos.  Denim, 

22  "     Blk.  Venetian, 
16    "     Blue  Flannel, 
13    "     Broadcloth, 

18  "     Creton  Plaid, 
134    "     Crown  Lining, 

20    "     Corduro}', 

33  "     Cashmere, 
470  doz.  Coates  Tliread, 

16  pes.  Duchess  Satin, 
233    "     P.  of  L.  Sheeting, 

19  "     French  Crepon, 
36    "     Kersey, 

91    "     Mon.  Cotton, 

23  "     O.  G.  Homespun, 
30    "     PI.  F.  Poplin, 

151    "     Pique  Muslin, 
69    "     Sateen, 
425  gro.  S.  P.  Buttons, 

34  pes.  Surah  Silk, 
30    "     Storm  Serge, 
73    "     Talbot  Fla'nnel, 

245  doz.  Torchon  Lace, 
9  pes.  Velveteen, 
26    "     Whipcord, 
71    "     Wash  Silk, 

10  shares  Wamsutta  Mills  Stock, 

Insurance  premium  (unexpired), 

Horses,  wagons  and  harnesses, 

Furniture  and  fixtures. 

Real  estate. 


937'^ 
777' 
804-^ 

1385' 
742' 

7380- 
703 

1372' 

796^ 
13969 
718 
1648 

5438-^ 
1152' 
1328^ 
10571 
3393' 

1761 

1352 
3229' 

311' 
1098^ 
3702^ 


10 

1. 10 

.20 

3-25 
.11 
.06 
.60 
.48. 

.37>^ 
1.65 

.07 
1.50 

•98^ 

.90 

•95 

.osyz 

•50 

.44 
.60 

•23 
.60 

.24 

.80 

.45 


1 150 
260 

735 

2550 

12200 


192 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Statement  of  Resources  and 


Property  as  under: 
Cash, 

Merchandise, 

Furniture, 

Horses,  Wagons  &  Harnesses, 

Real  Estate, 

Wamsutta  Mills  Stock, 

Book  accounts  considered  good  as  under: 
Accounts  Receivable, 
Bills  Receivable, 

Other  resoiurces  as  under: 

Interest, 

Insurance, 

Rent, 


in  safe  150.00 

"  bank  9600.00 

as  per  inventory 
valued  at 


as  per  sales  ledger 
"     "    bill  book 


due  on  bills  receivable 

unexpired 

due  on  flat 


1  9750 

'  20210 

12 

1 

2475 
693 

12 150 
1050 

46328 

9545 
4782 

40 
25 

14327 

30 
250 

90 

25 

370 
61026 

12 


2^ 
02 


A.  B.  Dane, 


a      t  ( 
( (      1  ( 


C.  E.  Freed  man, 


G.  H.  Irving, 


Proof. 

stock  account 
private  ^'f  balance  800.00 

withdrew  200.00 

salary 

interest  on  investment 
net  gain 

stock  account 
private  '^r  balance  745-oo 

withdrew  150.00 

salary 

interest  on  investment 
net  gain 

stock  account 
private  ^fc  balance 
salary 

interest  on  investment 
net  gain 

withdrew 


1 

14460 

600 

125 

1 

72 
264 

30 
78 

1062 
13400 

595 

150 
65 

20 

264 

77 

1074 
1795 

125 

175 
\          8 
1   264 

98 
77 

573 
15U 

75 
88 

422 

32214 

oS 


87 
92 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


193 


IvIABILlTlKS,    SEPTEMBKR   30,    190-. 


Book  accounts  due  others  as  under: 
Accounts  Paj-able, 
Bills  Payable, 

Other  liabilities  as  under: 

Interest, 

*  Present  Worth, 


Present  Worth, 


*To  be  written  in  red  ink. 


as  per  pm-chase  ledger 
"     "    bill  book 


due  on  bills  payable 


7068 
21577 


32 
28 


28645   60 

165    50 
32214    92 


61026 


02 


Proof. 


32214 


92 


32214  92 


Com. — 13 


194 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Price  Lists  for 


I. 

2. 

3- 

4- 

5- 
6. 

7- 
8. 

9- 

lO. 

II. 

12. 

13- 
14. 

15- 

16. 

17- 
18. 

19- 
20. 
21. 
22. 

23- 

24. 

25- 
26. 


Amoskeag  Denim      .    .    .    . 

Blk.  Venetian 

Blue  Flannel 

Broadcloth 

Creton  Plaid 

C.  Lining 

Cashmere 

Coates  Thread 

Duchess  Satin 

Fruit  of  Loom  Sheeting  .    . 

French  Crepon 

Kersey,  54  in 

Monum't  Unblchd.  Cotton 
Oxford  Gray  Homespun  .  . 
Plain  French  Poplin    .    .    . 

Pique  Muslin 

Smoked  Pearl  Buttons    .    . 

Surah  Silk 

Sateen  

Storm  Serge,  Navy  Blue  .    . 

Talbot  Flannel 

Torchon  Lace 

Velveteen  (248) 

Whipcord 

Wash  Silk 

Corduroy 


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MODERN    ILLUSTRATIVE    BOOKKEEPING. 


195 


August  and  September. 


11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

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4.06 

4.19 

4.07 

4.20 

4.08 

4.21 

4.09 

4.22 

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4.11 

4.24 

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1.82 

1.80 

1.78 

1.76 

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1.72 

1.70 

1.68 

1.62 

1.64 

1.56 

1.58 

1.66 

1.60 

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II. 

1.65 

1.76 

1.74 

1.78 

1.72 

1.80 

1.70 

1.82 

1.68 

1.84 

1.66 

1.62 

1.63 

1.61 

1.64 

12. 

I-3I 

1. 21 

1.30 

1.22 

1.29 

1.23 

1.28 

1.24 

1.27 

1-25 

1.26 

1.30 

1.32 

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1. 18 

1.20 

1.22 

1.24 

1-25 

1.26 

1.28 

1.30 

1.32 

1.38 

1.36 

1.44 

1.42 

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1.40 

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1.22 

1.08 

1.24 

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1.26 

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.67 

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.61 

•77 

.60 

•78 

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.68 

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196  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

QUESTIONS. 

1.  AAHiat  special  columns  appear  at  the  left  of  the  journal-day  book  page?     Wliar 
special  columns  at  the  right  of  the  journal-day  book  page  ? 

2.  Explain  the  posting  of  the  items  and  the  totals  of  these  columns. 

3.  Explain  the  uses  of  Amount  of  Invoice,  Discount  Allowed,  and  Amount  Received 
or  Amount  Paid  columns  of  the  cash  book. 

4.  How  are  C.  O.  D.  sales  shipped  by  freight? 

5.  If  you  desired  to  return  a  part  of  merchandise  purchased,  how  would  j-ou  notify 
the  seller  so  as  to  receive  credit  for  the  amount  returned  ? 

6.  What  is  a  credit  memorandum  ? 

7.  Explain  the  balance  ledger  used  in  the  August  and  September  work,  and  state  its 
advantages. 

8.  What  account  in  the  main  ledger  is  an  abstract  of  the  sales  ledger? 

9.  What  account  in  the  main  ledger  is  an  abstract  of  the  purchase  ledger? 

10.  To  what  accounts  in  the  main  ledger  should  the  footing  of  the  last  column  of  the  sales 
book  be  posted  ?    To  what  book  should  the  ' '  on  account ' '  items  of  the  sales  book  be  posted  ? 

11.  Explain  the  posting  of  the  items  and  the  totalof  the  invoice  book. 

12.  In  the  statement  of  losses  and  gains,  what  accounts  appear  that  have  no  connec- 
tion with  the  dry  goods  business  ? 

13.  Why  should  a  special  section  of  the  statement  be  given  to  such  accounts  as  Real 
Estate,  Wamsutta  Mills  Stock,  and  Rent? 

14.  How  would  a  gain  or  a  loss  on  real  estate  be  likely  to  occur? 

15.  When  would  a  gain  appear  on  such  an  account  as  Wamsutta  Mills  Stock?    WTien 
a  loss? 

16.  Explain  the  method  of  finding  the  interest  due  a  partner. 

17.  Explain  the  method  of  closing  the  Eoss  and  Gain  account  in  the  main  ledger. 

18.  Explain  how  each  partner's  interest  and  salary  would  be  shown  on  his  private 
account. 

19.  How  would  you  close  the  private  account  of  each  partner? 

20.  Explain  the  method  of  proving  the  present  worth  of  the  statement  of  resources 
and  liabilities  by  means  of  partners'  stock  and  private  accounts. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  197 


SINGLE  ENTRY. 


Single  entry  books  differ  from  those  used  in  double  entry  bookkeeping  chiefly  in  the 
fact  that  a  single  entry  ledger  contains  only  accounts  with  persons,  all  property  accounts 
being  omitted. 

The  principle  of  equal  debits  and  credits,  belonging  to  double  entry,  is  not  a  part 
of  single  entry  bookkeeping,  and  consequently  no  equality  exists  between  the  debit 
and  credit  sides  of  the  ledger,  and  no  trial  balance  can  be  taken  of  a  single  entry 
ledger. 

An  account  with  cash  should  be  kept  in  the  cash  book,  as  in  double  entrj^  bookkeeping, 
and  by  means  of  a  bill  book  it  is  easy  to  keep  a  record  of  bills  receivable  and  bills  payable. 
An  account  with  merchandise  may  be  kept  by  the  use  of  an  invoice,  or  purchase,  book 
and  a  sales  book. 

A  well  arranged  set  of  single  entry  books,  correctly  kept,  will  show  as  complete  a 
record  of  the  business  as  will  a  set  of  books  kept  by  double  entry;  but  it  will  not  be  in  as 
compact  form,  and  will  require  more  work  on  the  part  of  the  bookkeeper. 

The  following  transactions  are  designed  to  illustrate  the  method  of  keeping  the  books 
of  a  modern,  up-to-date  retail  grocery  business,  at  first  bj^  means  of  single  entry  books, 
after  which  will  be  shown  the  method  of  changing  from  single  entry  to  double  entry,  con- 
tinuing the  business  by  double  entry,  and  incidentally  showing  the  use  of  the  card  S3'stem 
of  ledger  bookkeeping. 

In  order  that  a  complete  record  of  the  business  may  be  obtained  bj-  single  entry  book- 
keeping, the  books  used  will  be  as  follows:  journal,  cash  book,  abstract  sales  book,  purchase 
book,  bill  book,  general  ledger,  and  card  ledger,  using  the  card  system  only  for  customers' 
accounts.  For  an  elementary  set  in  single  entry,  requiring  a  less  complete  record  of  the 
business,  see  Appendix. 

Journal.  This  book  contains  such  debits  and  credits  as  may  occur  outside  of  the 
cash  book  and  the  sales  sheets,  which  make  up  the  abstract  sales  book,  and  in  it  are  kept 
such  matters  of  record  as  would  appear  in  the  ordinary  double  entry  journal. 

The  form  on  page  198  illustrates  the  journal. 

Sales  Sheets.  When  sales  of  merchandise  on  account  are  made,  in  most  modem 
grocery  stores  sales  sheets,  or  tickets,  are  used,  and  by  means  of  carbon  paper  are  written 
in  duplicate  by  the  salesman  as  he  takes  the  order  verbally  or  from  an  order  book. 

The  form  on  page  199  illustrates  the  sales  sheet. 

The  original  and  duplicate  sales  sheets  are  sent  to  the  office  to  have  the  prices  O.  K'd. 
The  original  is  retained  by  the  bookkeeper,  and  the  duplicate  is  sent  with  the  goods  when 
delivered,  so  that  the  customer  receives  a  complete  bill  with  each  lot  of  goods  purchased, 
and  there  is  little  chance  for  mistakes,  or  for  a  dispute,  when  the  weekl)^  or  monthly  bill  is 
rendered.  The  bookkeeper  should  enter  the  amount  of  each  sales  sheet  upon  his  abstract 
sales  sheet  for  the  day. 

The  form  on  page  200  illustrates  a  daily  abstract  sales  sheet,  in  which  the  name  of  each 
customer  is  given. 


198 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


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MODERN    ILLUSTRATIVE    BOOKKEEPING. 


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Many  bookkeepers  keep  a  regular  abstract  sales  book,  using  the  same  form  as  above,  and  posting 
directly  from  this  book  to  the  customer's  account  in  the  ledger.  A  better  method  is  to  keep  only  the 
amount  of  each  sale  on  the  abstract  sales  sheet  for  the  day,  and  carry  the  total  of  the  day's  sales  to  the 
abstract  sales  book  at  the  close  of  each  day,  posting  daily  the  items  from  the  sales  sheet  to  the  customer's 
monthly  statement  sheet,  and  carrying  only  the  total  of  this  monthly  sheet  to  the  debit  of  the  customer, 
at  the  end  of  the  week  or  month,  on  his  ledger  card,  or  page,  in  case  a  book  is  used  instead  of  cards. 
This  method  is  preferable,  as  these  sales  sheets  are  original  entries,  and  it  is  to  them  that  reference  must 
be  made  if  any  discrepancy  exists  between  an  account  rendered  and  the  record  kept  by  a  customer.  The 
bookkeeper  should  post  these  sales  sheets  daily  to  the  monthly  statement  sheets,  and  when  the  posting 
is  completed,  should  file  away  the  sales  sheets  alphabetically,  or  each  day's  sheets  in  a  separate  package, 
so  that  they  may  be  readily  accessible,  should  they  be  required  to  verify  a  customer's  monthly  statement 
after  it  has  been  rendered. 

C.'asli  Sales.  Sales  of  merchandise  for  cash  are  made  in  the  same  manner  as  sales  on 
account,  except  that  a  sales  sheet  is  used  similar  in  form  to  the  one  on  page  199,  which  is 
receipted  when  the  goods  are  delivered;  or,  if  the  sale  is  made  in  the  store,  the  customer 
is  given  a  cash  ticket,  which  is  presented  with  the  money  to  the  cashier,  who  files  the 
ticket  with  the  cash  sales  sheets  on  a  spindle,  or  in  stich  manner  as  may  be  desired.  The 
sum  of  the  amounts  of  these  tickets  and  of  the  cash  sales  sheets  should  (.([iial  the  sum  of 
the  cash  sales  of  the  day,  and  should  be  carried  to  the  Sales  for  Cash  colunui  of  the  abstract 
sales  book,  and  also  to  the  debit  side  of  the  cash  book.  (See  form  of  abstract  sales  book, 
page  201,  and  form  of  cash  book,  pages  204  and  205.) 

Abstract  Sales  Itook.  The  abstract  sales  book  contains  cohnnns  for  dak',  nunil)Lr  of 
daily  abstract  sales  sheet,  sales  on  accotuit,  cash  sales,  total  daily  sales,  total  weekly  sales, 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


201 


and  total  monthly  sales,  so  that  the  book  will  show  at  a  glance  each  day's  business,  both 
cash  and  credit,  the  sum  in  total,  and  the  total  sales  at  the  end  of  each  week  and  month. 


The  following  form  illustrates  the  abstract  sales  book. 


Abstract  Sales  Book. 


/^^- 


Date. 


Oc^ 


6 


From  Sales  Sheet  No. 


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Sales  for  Cash. 


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yrf. 


7/= 


Total  Daily. 


/// 
Z-  2-i? 
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3  / 


Total  Weekly. 


Vf 


Total  Monthly. 


In  the  series  of  transactions  follow-ing,  the  daily  abstract  sales  sheet  will  be  used  according  to  the 
form  on  page  200,  and  the  abstract  sales  book  will  contain  only  totals,  as  shown  in  the  above  form. 

It  is  evident  that  the  sum  of  the  footings  of  the  Sales  for  Cash  and  the  Sales  on  Account 
columns  of  the  abstract  sales  book  will  at  any  time  show  the  total  sales  of  merchandise  to 
date. 

Purchase  Book.  This  book  is  an  abstract  of  the  invoices  of  merchandise  purchased 
in  the  regular  course  of  business,  and  where  the  ordinary  invoice  book  is  kept,  it  would, 
of  course,  be  unnecessary  to  keep  the  ptuchase  book,  since  all  the  material  of  the  purchase 
book  and  also  the  items  of  these  purchases  would  be  found  in  the  invoice  book.  Many 
bookkeepers,  however,  keep  a  purchase  book,  and  file  the  invoices  loose,  instead  of  pasting 
them  into  a  book,  and  in  this  series  of  transactions,  since  no  invoices  are  received  by  the 
student,  it  is  necessary  to  keep  an  abstract  of  these  invoices,  hence  the  ptuchase  book, 
which  contains  colums  for  the  date  of  the  invoice,  the  ledger  folio,  the  name  of  the  person 
or  firm  from  whom  the  goods  were  bought,  the  terms  of  payment,  the  due  date,  the  date 
of  payment,  the  amount  of  the  invoice,  the  discount,  and  the  amount  paid. 

It  is  evident  that  the  footing  of  the  Amount  of  Invoice  column  in  the  purchase  book 
will,  at  any  time,  show  the  amount  of  merchandise  purchased,  and  this  amount,  less  the 
footing  of  the  Discount  column,  will  be  the  net  cost  of  merchandise  at  any  date.  The 
total  footing  of  the  columns  of  the  abstract  sales  book  will  show  the  amount  odf  merchan- 
dise sold  at  any  time.  To  this  amoiuit  add  the  inventory  of  merchandise  tmsold,  and 
the  difference  between  this  sum  and  the  net  cost  of  merchandise  will  show  the  gain  or  loss. 

The  form  on  page  202  illustrates  the  purchase  book. 

Cash  Book.  This  book  does  not  differ  materially  from  the  cash  book  kept  in  double 
entry.  The  left-hand  page  contains  a  record  of  all  cash  received,  and  the  right-hand  page 
a  record  of  all  cash  paid  out;   also  a  special  column  for  merchandise  discount  allowed  on 


202 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


PURCHASE  BOOK. 


Datk  or  TirvoiCL 


NAME  AND 


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bills  paid  within  the  specified  date.  When  such  accounts  are  posted,  two  debit  entries 
should  be  made  on  the  personal  account  affected,  one  for  the  merchandise  discount,  and 
one  for  the  net  amount  paid,  thus  canceling  the  amount  of  the  invoice  (see  instructions 
for  posting  merchandise  discount,  page  138).  It  is  not  necessary  in  a  single  entr^-  cash 
book  to  write  the  name  of  the  account  affected  by  the  transaction,  except  when  it  is  a 
personal  account,  as  only  accounts  with  persons  are  kept  in  the  ledger,  and  only  that  part 
of  the  cash  book  which  affects  personal  accounts  will  be  posted  to  the  ledger. 
The  form  on  pages  204  and  205  illustrates  the  cash  book. 

Ciistomors'  Statenu'iits.  In  most  grocery  establishments,  where  modern  methods 
are  in  use,  the  items  from  the  sales  sheets  are  not  posted  to  the  ledger  account  of  the 
customer,  but  instead  are  posted  directly  from  the  sales  sheets  to  a  monthly  statement 
sheet,  which  at  the  end  of  the  week  or  month  is  handed,  or  mailed,  to  the  customer,  and 
the  totals  only  of  these  sheets  are  posted  to  his  account  in  the  ledger.  When  a  statement 
sheet  is  handed  in  with  cash  to  make  payment  of  the  account,  the  sheet  is  receipted  and 
returned  to  the  customer,  who  receives  credit  in  the  ledger  for  the  amount  of  his  ])ayincnt 
in  the  regular  posting  from  the  cash  book,  where  the  payment  should  be  entered  when 
made.  The  postings  to  the  statement  sheets  should  be  made  at  the  end  of  eacli  day  before 
the  sales  sheets  of  that  day  are  filed  away  for  reference. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


203 


The  following  form  illustrates  a  customer's  statement  sheet. 


MONTHLY  STATEMENT. 

Thos.  E.  Sears, 

GROCER, 

Liberty  Building,  Main  St.  East. 

14,  18  and  20  Lake  Avenue, 

Plymouth  Avenue,  cor.  Spring  St. 

Rochester,  N.  7.,    y^^/-:  /„    \90 

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Some  bookkeepers  would  post  the  total  of  each  sales  sheet  to  the  debit  of  the  customer  on  his  ledger 
card,  or  page,  but  this  seems  tnmecessary,  since  the  monthly  statement  sheet  is  really  an  itemized  ledger 
account  with  the  customer.  A  shorter  method  would  consist  in  posting  to  the  customer's  statement  sheet 
only  the  totals  of  the  sales  sheets,  not  repeating  the  items  on  the  statement  sheet.  This  saves  a  large 
amount  of  work  to  the  bookkeeper,  and  if  the  customer  keeps  his  sales  sheets  delivered  with  each  order, 
he  can  readil}'  compare  his  statement  sheet  with  his  sales  sheets;  but  in  practice  it  is  found  that  customers 
do  not  invariably  keep  these  sales  sheets,  and  there  are  more  likely  to  be  disputes  about  the  amount  of 
the  monthly  statement  than  when  the  items  are  repeated  on  the  statement  sheet. 


204 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


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Ledgerette. 

-A 


Each  day  after  the  customers'  statements  sheets  are  posted,  they  should  be 
indexed  file,  where  they  are  readily  accessible,  and  from  which  they  should  be 
soon  as  the  month's  work  is  posted,  and  handed, 
or  mailed,  to  the  customer.  An  excellent  form 
of  file  is  the  "  Ledgerette,"  shown  in  the  accom- 
panying cut. 

The  system  of  bookkeeping  ])y  means  of  loose 
sheets  and  cards,  properly  indexed,  in  place  of 
books  has  grown  rapidly  in  favor  during  the 
past  few  years;  especially  is  this  true  in  l)usi- 
ness  houses  where  there  are  numerous  sub- 
divisions, and  where  a  large  number  of  l)ooks 
would  be  necessary  in  order  to  keep  a  complete 
record.     The  records  of  the  day  are  made  (ju 


placed 

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cd  as 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


205 


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*To  be  entered  in  red  ink. 
loose  sheets,  and  these  sheets  are  handed  to  the  head  bookkeeper,  who  places  them  in 
properly  arranged  files,  so  that  the  record  of  each  day's  business  in  every  department  is 
readily  accessible.  Out  of  this  system  of  account  keeping  has  grown  what  is  known 
as  the  index  card  ledger,  a  method  of  keeping  ledger  accounts  which  possesses  many 
advantages,  among  which  are  the  following. 

First,  the  ledger  kept  by  this  system  contains  no  accounts  with  persons  who  have 
ceased  to  do  business  with  the  firm,  for  as  soon  as  a  customer  closes  his  account,  either 
by  removing  from  the  place,  or  by  transferring  his  custom  to  some  other  business  house, 
his  card  is  taken  from  the  receptacle  containing  the  ledger  cards  and  placed  in  a  file  kept 
for  accounts  which  have  been  closed.  Should  the  customer  return,  the  card  may  be  taken 
from  this  file  and  placed  in  the  ledger  index.  In  taking  a  trial  balance,  therefore,  the 
bookkeeper  has  only  live  accounts  to  deal  with,  and  there  is  less  liability  to  make  mistakes. 

Second,  the  cards  are  easily  handled,  and  once  the  cabinet  has  been  purchased,  it  can 
be  extended  indefinitely  at  a  trifling  expense,  the  cards  costing  no  more  than  ordinary 


206 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


paper.  In  case  statements  are  desired  promptly,  a  ledger  of  a  thousand  customers'  accounts 
could  be  worked  upon  at  the  same  time  by  the  entire  office  force,  while  with  a  book  ledger 
but  one  person  can  work  on  statements  at  a  time.  In  case  of  disputes  regarding  accounts, 
where  it  is  necessary  to  produce  the  books  in  court,  the  ledger  card  or  loose  sheet  con- 
taining the  account  in  dispute  can  be  produced  without  interfering  with  the  work  of  the 
accountants  at  the  office. 

An  objection  urged  against  the  card  sj'-stem  has  been  that  it  is  difficult  in  posting  to 
find  the  individual  cards,  but  if  properly  indexed  by  number  there  is  no  difficulty  from 
this  source.     The  cards  can  be  found  as  readily  as  the  page  of  a  customer  in  an  ordinary 


ledger. 


Form  of  Card  Ledger. 


The  above  cut  illustrates  the  form  of  a  card  Icdgvr  in<lexcd  alphabcticall\-,  and  if 
the  numl^er  of  customers  is  not  too  large,  this  arrangement  is  preferabk ,  as  il  requires  no 
other  index.  If  the  business  be  very  extensive,  Iidwcnlt,  il  is  better  to  mnnhcr  each 
customer  and  divide  the  ledger  into  hundreds,  then  subdi\  idc  llic  huiubxds  into  kns.  A 
small  tab  at  the  top  of  each  card  is  provided  for  a  number,  and  an  index  book  is  kept  for 
the  names  corresponding  to  the  numbers. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


207 


The  card  itself  does  not  differ  in  ruling  from  the  ordinary  ledger  page.  In  posting  to 
the  ledger  card,  first  enter  in  the  explanation  column  the  dates  of  the  sales  sheets  which 
make  up  the  customer's  statement  sheet,  then  enter  the  total  of  the  statement  in  the  debit 
money  column.  It  may  require  two  or  three  lines  of  the  explanation  space  to  write  the 
dates  of  the  sales  sheets,  but  these  dates  will  save  a  great  amount  of  labor  in  looking  up 
sales  sheets  from  the  daily  files  in  case  of  a  disagreement  between  a  customer's  account  as 
kept  by  him  and  as  kept  by  the  bookkeeper. 

The  following  is  a  form  of  ledger  card. 

lyEDGKR  Card. 


^^n,^  --c-^^^T^-^^^^^  yT^>Zy,-^<^^<i^,^y>-7^^       1 

Oca/paff'nn   —(^/-/^■y^.^^'T^'^^t^^^. 

9?«r^^r^      ^   /   ^-J^^T^^^^^  /^^y~^^ 

%iing      (^  /., 

^Ji/^^. 

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208  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

RETAIL   GROCERY    BUSINESS. 

WORK    FOR   THE    STUDENT. 
October  i,   190-. 

You  have  this  day  ptirchased  of  Adams  &  Hackland  their  entire  stock  of  groceries, 
situated  in  the  store  |f222  Division  St.,  and  invoiced  at  $2993.33,  at  75^  of  the  invoiced 
value,  for  which  you  have  paid  cash.  The  net  value  of  this  stock  of  merchandise  repre- 
sents 3'our  merchandise  investment;  you  invest  $300  in  cash  also. 

You  have  agreed  to  collect  the  accounts  due  Adams  &  Hackland  and  allow  them  95'"^' 
of  their  face  valuation,  and  become  responsible  yourself  for  any  losses  which  ma^^  arise 
from  bad  debts. 

The  following  customers  of  Adams  &  Hackland  owe  the  amounts  opposite  their  names. 


Mrs.  S.  T.  Worthen, 

26  Eaurel  St., 

$23.45 

A.  B.  Ryder, 

61  Spring  St., 

44.28 

C.  H.  Stratton,  Elm 

House, 

Central  Square, 

212.40 

Mrs.  Wm.  Hanson, 

28  Summer  St., 

31-42 

Wm.  Harper, 

62  East  St., 

38.49 

Edward  Austin, 

31  Green  St., 

28.74 

Mrs.  F.  Gilford, 

44  Brown  St., 

21.39 

E.  T.  Corey, 

54  Brown  St., 

18.96 

Mrs.  A.  Waldron, 

82  Chestnut  St., 

39-48 

P.  J.  McGuire,  Cottage 

Hotel, 

52  Ann  St., 

169.34 

$627.95 

You  have  agreed  to  pay  Adams  &  Hackland  the  amount  of  95/  of  these  bills  within 
three  months  of  Oct.  ist.  You  have  also  agreed  to  continue  the  lease  of  the  store  ;:222 
Division  St.  until  Jan.  ist,  at  the  present  rental  of  $50  per  month,  and  to  retain  the  clerks, 
Thos.  Stuart  and  Eugene  Canfield,  at  a  salary  of  $12  per  week  each,  and  Edward  Marsh 
as  delivery  clerk  at  $20  per  week,  he  furnishing  a  horse  and  delivery  wagon. 

Instructions. — Make  an  entry  in  the  journal,  giving  yourself  credit  for  the  net  value 
of  the  merchandise  and  for  95'd  of  the  accounts  purchased  from  Adams  &  Hackland;  in 
the  cash  book  credit  yourself  with  $300  invested.  In  the  journal  credit  Adams  &  Hack- 
land  with  95;^  of  the  value  of  the  accounts  purchased  of  them;  also  enter  a  memorandum 
of  the  clerks  and  rental  agreements. 

Take  from  your  customers'  card  ledger  the  blank  cards,  and  enter  on  the  debit  sitle, 
after  the  name  and  address  of  each  person  have  been  written,  the  amount  due,  inider  date 
of  Oct.  ist,  writing  Balance  in  the  explanation  column. 

TRANSACTIONS. 

Bought  of  Hackett  Bros.,  City,  on  account,  60  ds.,  2'.'  10  ds.,  10  Inls.  N.  S.  flour  at 
$5;    10  brls.  Redcloud  at  $4.50;   5  brls.  pastry  at  $5.50. 

Bought  of  E.  J.  Dunn  Grocery  Co.,  City,  4  mos.,  ^i  10  ds.,  2  hf.  chls.  Young  Hyson 
tea,  140  lljs.,  at  32/';   2  hf.  chts.  Oolong,  100  lbs.,  at  47^^;  2  hf.  chts.  Eng.  Breakfast,  120 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  209 

lbs.,  at  30^;  2  bags  Rio  coffee,  250  lbs.,  at  loi';  i  bale  Mocha,  150  lbs.,  at  22^;  2  mats 
Java,  150  lbs.,  at  21^'. 

Bought  of  the*  American  Sugar  Refining  Co.,  New  York,  on  account,  30  ds.,  i^  10 
ds.,  .5  brls.,  1565  lbs.,  G.  sugar  at  ^]4'f';  2  brls.,  622  lbs.,  C.  sugar  at  ^f. 

Purchased,  for  cash,  of  Gray  Bros.,  Cit}-,  20  bu.  potatoes  at  ^of;  5  brls.  apples  at  $1.50. 

Purchased,  for  cash,  of  Williams  &  Andrews,  City,  60  doz.  fresh  eggs  at  20^-;  120  doz. 
case  eggs  at  15^/. 

Instructions. — Enter  your  purchases  in  the  purchase  book  (see  model,  page  202). 
The  following  sales  slips  have  been  handed  in  by  the  salesmen. 

No.  1. — Mrs.  S.  T.  Worthen,  :;26  lyaurel  St.,  3  lbs.  butter  at  25'/;  12  eggs,  20'/;  i  pk, 
apples,  20'/;   I  pk.  potatoes,  15'/;   i  gal.  K.  oil,  12'/;   i  lb.  M.  &  J.  coffee,  32/-. 

No.  2.— A.  B.  Ryder,  J6i  Spring  St.,  i  lb.  E.  B.  tea,  60'/;  i  lb.  M.  &  J.  coffee,  32^/; 
I  pkg.  gelatine,  15'';  2  lbs.  raisins  at  i6f;   10  lbs.  butter  at  23'/;   12  S.  F.  eggs,  2^'p. 

No.  3. — C.  H.  Stratton,  Elm  House,  i  tub  butter,  40  lbs.,  at  22-;';  10  doz.  case  eggs 
at  i8^-;  2  brls.  apples  at  $1.75;   i  brl.  N.  S.  flour,  $5.50;  4  sacks  pastry  flour  at  $1.50. 

No.  4. — Mrs.  Wm.  Hanson,  c.22>  Summer  St.,  2  pkgs.  rolled  oats  at  i2]4<f-,  2  pkgs. 
Germea  at  15^;  5  doz.  case  eggs  at  18/;  6  cans  tomatoes  at  lof;  6  cans  corn  at  lo^';  20 
lbs.  G.  sugar  at  6;/;  2  lbs.  Rio  coffee  at  20;';   %  lb.  W.  pepper  at  40'/. 

No.  5. — Wm.  Harper,  ::62  East  St.,  2  lbs.  butter  at  26'/;  i  box  boneless  codfish,  45^/-; 
I  can  tomatoes,  lof;   1  bu,  potatoes,  6oi ;   i  pk.  apples,  20'/-;   i  lb.  Y.  H.  tea,  50'/. 

No.  6. — Edward  Austin,  ^31  Green  St.,  i  brl.  N.  S.  flour,  $5.50;  2  lbs.  cream  cheese 
at  i6f;   I  lb.  Y.  H.  tea,  50/-;   12  S.  F.  eggs,  24'/;  5  gals.  K.  oil  at  i3'/'. 

No.  7. — Mrs.  F.  Gilford,  ::44  Brown  St.,  12  S.  F.  eggs,  24'/;  2  lbs.  butter  at  26'f]  i 
pk.  potatoes,  15'/;  i  head  cabbage,  6'/;  2  bunches  beets  at  ^'t;  i  pkg.  Germea,  15'/;  5 
cakes  Ivory  soap  at  5/-;  5  lbs.  rice  at  10/;   i  gal  molasses,  6o'l\ 

No.  8. — Edward  E.  Corey,  554  Brown  St.,  i  broom,  35'/-;  %  gal.  maple  syrup  at  $1.25; 
I  can  tomatoes,  10/;   i  bu.  potatoes,  60:/;   i  brl.  apples,  $2. 

No.  9.— Mrs.  A.  Waldron,  ::82  Chestnut  St.,  2  lbs.  butter  at  26f\  i  lb.  cheese,  16^; 
I  sack  pastry  flour,  $1.50;  i  pkg.  Germea,  15'/;  12  S.  F.  eggs,  26'/;  i  pkg.  H.  O.  pan- 
cake, lof;   I  qt.  maple  syrup,  35^-. 

No.  10.— P.  J.  McGuire,  Cottage  Hotel,  '.^2  Ann  St.,  i  lb.  M.  &  J.  coffee,  32<-;  i 
washboard,  50/-;  i  lb.  raisins,  lof;  i  bottle  bluing,  10;';  i  broom,  30'/;  i  pkg.  rolled  oats, 
13^/;   12  oranges,  35^/.  . 

Instructions. — Take  a  statement  sheet  for  each  person  named  on  the  sales  slips,  and 
enter  the  items  of  each  day's  sales  on  the  statement  sheets,  allowing  a  line  for  each  item. 
When  this  is  completed,  place  the  statement  sheets  in  yoiu"  ledgerette  file.  In  actual 
practice,  at  the  end  of  the  day  the  slips  would  be  placed  in  an  envelope  or  file,  and  marked 
with  the  date,  Oct.  i,  190-,  so  that  if  any  dispute  arose  regarding  the  statement  slips  thej^ 
could  readily  be  referred  to.  (See  model  of  statement  sheet,  page  203;  see  cut  of  ledger- 
ette, page  204.)     No  entries  for  the  above  transactions  are  made  in  the  books. 

The  old  style  grocer  enters  all  his  sales  on  a  blotter,  posts  from  the  blotter  to  the  ledger, 
and  makes  out  his  statements  from  the  ledger  at  the  end  of  the  month.    The  modem  grocer 

Com. — 14 


210  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

posts  the  sales  slips  directly  to  the  customers'  monthly  statement  sheets,  and  at  the  end 
of  the  month  the  statements  are  ready  for  the  customers,  as  the  bookkeeper  should  do  his 
posting  at  the  end  of  each  day.  * 

The  footings  only  of  the  statement  sheets  are  carried  to  the  customers'  ledger.  In 
this  series  of  transactions  the  card  ledger  is  used,  but  it  will  readily  be  seen  that  the  card 
ledger  does  not  differ  from  an  ordinar}-  customers'  ledger  (see  explanation  of  card  ledger 
on  page  205). 

The  amount  of  cash  sales,  as  shown  by  the  cash  tickets  handed  in  by  the  salesmen 
and  the  customers,  is  $121.45.  Enter  this  amount  in  the  cash  book,  on  the  debit  side, 
with  the  explanation,  Cash  sales,  as  per  tickets. 

Enter  the  total  of  each  customer' s  sales  sheet  against  the  customer's  name  on  an  abstract 
sales  sheet,  dated  Oct.  z,  and  numbered  i;  also  enter  the  total  cash  sales  imderneath,  and 
carry  these  amounts  to  the  proper  columns  of  the  abstract  sales  book  (see  models,  pages 
200  and  201). 

Paid  cash  as  follows:  Books  and  stationery,  $6.25;  postage  stamps,  $i;  one  month's 
rent  in  advance,  $50;  merchandise  purchased  of  Gra}^  Bros.,  $15.50;  merchandise  pur- 
chased of  Williams  &  Andrews,  $30.  Enter  in  the  cash  book  (see  form,  pages  204 
and  205). 

Balance  5^our  cash  book,  entering  the  difference  in  red  ink  on  the  credit  side.  Bring 
down  the  balance  on  the  left-hand,  or  debit,  side,  in  the  second  column,  under  date  of 
Oct.  8th.  In  this  series  of  transactions  the  cash  book  will  be  balanced  at  the  close  of 
each  day's  business,  in  accordance  with  the  custom  in  actual  retail  business. 

October  8,   190-. 

Purchased  of  S.  M.  Crockett  &  Co.,  City,  on  account,  30  days,  3'»  10  ds.,  5  doz.  tomato 
ketchup  at  $1.50;   i  gro.  bluing,  $7.50;  3  doz.  brooms  at  $2. 

Purchased  of  Gray  Bros.,  for  cash,  50  heads  cabbage  at  4'/;  60  bunches  beets  at  2(f-. 

Bought,  for  cash,  from  market  wagons,  20  doz.  S.  F.  eggs  at  2o/';  60  lbs  cream  cheese 
at  12.'. 

The  following  sales  .slips  have  been  handed  in  by  the  salesmen. 

No.  1. — Mrs.  S.  T.  Worthen,  10  lbs.  G.  .sugar  at  e^y"-;  i  bottle  bluing,  ic/-;  2  lbs. 
cheese  at  i6/';   i  lb.  Y.  H.  tea,  50^/. 

No.  2. — Wm.  Harper,  i  lb.  M.  &  J.  coffee,  32''/;  i  l)rl.  N.  S.  flour.  $5.75:  2  qts. 
molasses  at  i2]4'l",  5  cakes  Ivory  .soap  at  5'/. 

No.  a. — A.  B.  Ryder,  10  lbs.  G.  sugar  at  6%<l!',  i  pkg.  R.  oats,  12'/;  i  pk.  potatoes, 
^5'i"y  5  gals.  K.  oil  at  13^/;  5  lbs.  lard  at  12^/. 

No.  4.— Mrs.  F.  Gilford,  10  lbs.  G.  sugar  at  6J^/;  i  lb.  M.  cS::  J.  coffee,  32/;  i^  lbs. 
cheese  at  16/;   i  sack  flour,  $1.50;    i  can  corn,  10'/;   i  can  tomatoes,  lo'/';   i  broom,  t^^',''. 

No.  5. — E.  B.  Woods,  ^44  Laurel  St.,  2  lbs.  print  butter  at  30/;  i  1)U.  potatoes,  6o'/-; 
I  pk.  apples,  20'/;  12  bananas,  20'/;  5  lbs.  G.  sugar  at  6>^i'/';  i  lamp  chinuiey,  10/;  1  brl. 
N.  S.  flour,  $5.75. 

No.  <>. — Edward  Austin,  10  lbs.  tul)  butler  at  24'/;  i  11).  M.  »S:  J.  coffee,  32'/;  5  lbs. 
lard  at  12'/;   i  broom,  35/;   10  lbs.  G.  sugar,  at  6^/;  3  lbs.  codfish  at  15'/. 


MODERN     ILLUSTRATIVE    BOOKKEEPING.  211 

No.  7. — Mrs.  A.  Waldron,  i  brl.  apples,  $2.25;   10  lbs.  lard  at  i2f ;   10  lbs.  sugar  at 
bYzi;  2  lbs.  Rio  coffee  at  20^';   i  lb.  Y.  H.  tea,  50/. 

No.  8. — C.  H.  Stratton,  Elm  House,  10  bu.  potatoes  at  55'/;  i  hf.  cht.,  50  lbs.,  B.  B. 
tea  at  50'/;  i  bale,  125  lbs.,  M.  »&  J.  coffee  at  3o/';  5  doz.  S.  F.  eggs  at  22^''-;  i  case  Germea, 
36  pkgs.,  $4.50;   I  brl.  oatmeal,  $4.75;   i  bx.  prunes,  50  lbs.,  $6. 

No.  9.— Chas.  A.  Dodge,  ^57  Chestnut  St.,  i  lb.  E.  B.  tea,  60'/;  i  lb.  M.  &  J.  coffee, 
32'/;  6  lemons,  18^/;   12  S.  F.  eggs,  24''/;   i  brl.  flour,  $5.75;  5  lbs.  lard  at  12'/. 

No.  10. — P.  J.  McGuire,  Cottage  Hotel,  i  gal.  vinegar,  25^/;  i  brl.  N.  S.  flour,  $5.75; 
5  lbs.  butter  at  24^/;  2  cans  C.  milk  at  isf;  i  bottle  O.  oil,  75^/;  i  bunch  celery,  15'/;  i 
can  chicken,  40^/. 

Cash  sales  for  the  da^^,  $214.12. 

Do  not  forget  to  make  proper  entries  on  a  daily  abstract  sales  sheet,  and  also  in  the 
abstract  sales  book. 

Received  cash  as  follows:  Mrs.  F.  Gilford,  $21.39;  P.  J.  McGuire,  $50;  Wm.  Harper, 
$18.49;  Mrs.  Wm.  Hanson,  $20;  merchandise  sales,  per  cash  tickets,  $214.12. 

Deposited  $550. 

In  this  set  you  will  not  have  a  check  book,  as  checks  are  not  given,  but  you  may  keep 
an  account  with  the  bank  on  the  page  preceding  Cash  in  your  cash  book.  Head  this  page, 
Account  with  City  Bank.  Write  the  date  the  same  as  in  the  cash  book;  in  the  first  expla- 
nation space  write  Deposit;  in  the  second  explanation  space.  Currency;  in  the  first  money 
column  the  amount,  $SS^-  When  you  give  a  check,  write  the  date,  the  name  of  the  party 
to  whom  the  check  is  given  in  the  first  explanation  space,  for  what  given  in  the  second 
explanation  space,  and  carry  the  amount  into  the  right-hand  money  column.  The  differ- 
ence at  any  time  between  the  right-hand  money  column  and  the  left-hand  money  column 
will  show  the  amount  of  cash  in  bank. 

Paid  cash  as  follows:  (Checks)  Hackett  Bros.,  invoice  of  Oct.  ist,  less  25?  (enter 
merchandise  discount  on  credit  side  of  cash  book,  in  first  column,  and  net  amount  of  bill 
in  second  column);  E.  J.  Dunn  Grocery  Co.,  invoice  of  Oct  ist,  less  ^'i .  (Currency) 
Gray  Bros.,  invoice  of  even  date,  $3.20;  merchandise  purchased  from  market  w^agons, 
$11.20;  salaries,  Stuart,  $12;  Canfield,  $12;  Marsh,  $20;  freight,  $3.42. 

Balance  your  cash  book,  and  bring  down  the  amount  the  same  as  in  double  entry. 

October  15,   190-. 

Bought  of  Park  &  Tilford,  New  York,  net  2  mos.,  3  10,  merchandise  as  per  invoice, 
$287.90. 

Bought  of  S.  S.  Pierce  &  Co.,  Boston,  net  2  mos.,  2  10,  merchandise  as  per  invoice, 
$468.32. 

Purchased  of  St.  lyouis  Milling  Co.,  St.  Louis,  net  4  mos.,  5  10,  merchandise  as  per 
invoice,  $450. 

Piurchased  of  Gray  Bros.,  City,  for  cash,  50  heads  cabbage  at  4^';  i  bu.  turnips,  45^/; 
80  brls.  apples  at  $2. 

Purchased  of  Trent  Commission  Co.,  City,  for  cash,  4  tubs  C.  butter,  200  lbs,  at  i-jih, 
10  baskets  late  peaches  at  65^/. 

9 


212  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

The  following  sales  slips  have  been  handed  in  bj-  the  salesmen. 

No.  1. — C.  H.  Stratton,  Elm  House,  i  pail  mackerel,  20  lbs.,  $4.25;  i  tub  lard,  60  lbs., 
at  lof;  I  doz.  tomato  ketchup,  $2.25;  6  doz.  S.  F.  eggs  at  22'/;  4  sacks  pastry  flour  at 
$1.50;   I  brl.  N.  S.  flour,  $5.50. 

Xo.  2. — Mrs.  S.  T.  Worthen,  i  brl.  apples,  $2.50;  i  bu.  potatoes,  60'';  5  lbs.  butter 
at  25'/;   12  S.  F.  eggs,  24'/;   i  lb.  M.  &  J.  coffee,  32'/. 

Xo.  3. — Mr.  Wm.  Harper,  20  lbs.  G.  sugar  at  6^^/;  10  lbs.  lard  at  12'r,  3  cans  corn 
at  lof ;   I  lb.  E.  B.  tea,  60'/;  4  lbs.  raisins  at  15/;   i  broom,  35'/. 

No.  4. — E.  ly.  Corey,  i  brl.  flour,  $5.75;  10  lbs.  tub  butter  at  24'/-;  Yo  lb.  pepper  at 
40'/;   I  box  sardines,  35'/;   12  pickles,  15'/. 

No.  5. — P.  J.  McGuire,  Cottage  Hotel,  i  case.  36  cans,  tomatoes  at  8''-;  i  case,  36 
cans,  corn  at  8'/;  i  tub  lard,  40  lbs.,  at  ii^/;  i  brl.,  212  lbs.,  sugar  at  6'/;  3  doz.  lemons 
at  25^/. 

No.  (>.— E.  B.  Woods,  I  brl.  apples,  $2.50;  i  lb.  E.  B.  tea,  60'/;  i  lb.  M.  &  J.  coffee, 
32^/;  5  lbs.  print  butter  at  30 /■;   i  clothesline,  30'/. 

No.  7. — Chas.  A.  Dodge,  20  lbs.  tub  butter  at  24'/-;  i  bu.  potatoes,  6of;  i  sack  pastry 
flour,  $1.50;   I  gal.  M.  syrup,  $1.25;   i  jug,  15:/-. 

iS'^o.  8. — Mrs.  F.  Gilford,  i  bu.  potatoes,  60'/;  2  pkgs.  shredded  wheat  biscuit  at  12^'/; 
ID  lbs.  tub  butter  at  24/;   i  ham,  12  lbs.,  at  12^/;   12  S.  F.  eggs,  25'/. 

No.  1).— Mrs.  A.  Waldron,  i  brl.  N.  S.  flour,  $5.75;  5  lbs.  tub  butter  at  24'/-;  i  lb.  E. 
B.  tea,  60/;   I  broom,  35/;    i  pkg.  gelatine,  i^'h,   i  pkg.  Cream  of  Wheat,  15/. 

No.  10.— Edward  Austin,  12  S.  F.  eggs,  25'/;  i  brl.  apples,  $2.25;  i  bu.  potatoes,  6of) 
I  can  sahnon,  24'/;   i  bottle  O.  oil,  35'/;    i  head  lettuce,  5'/. 

No.  1 1. — Mrs.  Wm.  Hanson,  i  brl.  N.  S.  flour,  $5.75;  i  bu.  potatoes,  60/;  20  lbs.  G. 
sugar  at  6^'/;    li  cht.,  18  lbs.,  Y.  H.  tea  at  45'/. 

No.  12.— A.  B.  Ryder,  i  brl.  N.  S.  flour,  $5.75;  i  bu.  potatoes,  60'/;  i  brl.  apples, 
$2.25;   I  bottle  ketchup,  22;';   i  qt.  beans,  lo^'';   i  lb.  pork,  12<I-. 

Cash  sales  for  the  day,  $184.96.      (Make  abstract,  and  enter  in  abstract  sales  book.) 

Received  cash  as  follows:  Mrs.  S.  T.  Worthen,  Sept.  account,  $23.45;  A.  B.  Ryder, 
$44.28;  Wm.  Harper,  $20;  Edward  Austin,  $28.74;  E.  E.  Corey,  $18.96;  Mrs.  Wm. 
Hanson,  $11.42;  merchandise  sales,  per  cash  tickets,  $184.96. 

Received  of  C.  H.  Stratton  his  note  at  4  mos.,  with  interest,  for  $212.40.  to  1)alance 
his  account  to  Oct.  ist.      (Enter  in  journal  and  bill  book.) 

Had  your  note  at  90  days  discounted  at  the  City  Bank,  and  received  credit  for  the  net 
proceeds.     Face  of  note,  $100;  discount,  90  ds.,  $ ;  net  proceeds,  $ . 

Deposited  $125. 

Paid  cash  as  follows:  (Checks)  second  hand  safe,  purchased  of  Diebold  Safe  Co., 
$100;  S.  M.  Crockett  &  Co.,  invoice  of  8th  inst.,  less  3',;  American  Sugar  Refining  Co., 
invoice  of  Oct.  ist,  less  V'r,  Gray  Bros.,  invoice  of  even  date,  $162.45;  Trent  Commission 
Co.,  invoice  of  even  date,  $40.50.  (Currency)  ofiice  desk  and  fixtures,  $30;  salaries, 
Stuart,  $12;   Marsh,  $20;  Canfield,  $12;  freight,  $57.42. 

(Student)  drew  ca.sh  for  private  use,  $50. 

Balance  your  cash  book. 


modern  illustrative  bookkeeping.  213 

October  22,  190-. 

Purchased  of  Gray  Bros.,  City,  for  cash,  10  brls.  apples  at  $2;  50  bu.  potatoes  at  45^-; 
30  doz.  case  eggs  at  15^-. 

Bought  from  market  wagons,  40  doz.  S.  F.  eggs  at  22'';  50  hds.  cabbage  at  5';';  400 
lbs.  squash  at  i'/. 

Bought  of  American  Sugar  Refining  Co.,  30  ds.,  i  '10,  merchandise  as  per  invoice, 
$124.72. 

Bought  of  S.  S.  Pierce  &  Co.,  Boston,  net  60,  3  10,  merchandise  valued  as  per  invoice, 
$468.75. 

Purchased  of  F.  H.  Leggett  &  Co. ,  New  York,  net  60,  310,  merchandise  as  per  invoice, 
$344.70. 

The  following  sales  slips  have  been  handed  in  by  the  salesmen. 

No.  1. — A.  B."R3-der,  i  pail  mackerel,  20  lbs.,  $3.75;  i  sack  pastry  flour,  $1.50;  12 
S.  F.  eggs,  25^/;   I  box  cigars,  $5.50;  5  lbs.  coffee  at  30'/;   12  oranges,  35^/. 

No.  2. — Mrs.  \Vm.  Hanson,  i  bx.,  5  lbs.,  codfish  at  12', ;  i  ham,  18  lbs.,  at  12^^/;  i 
case  C.  com,  36  cans,  at  8'/;  i  case  C.  tomatoes,  36  cans,  at  8'/;  4  sacks  pastry  flour  at 
$1.50;  2  brooms  at  30'/. 

No.  3. — Edward  Austin,  i  ham,  12  lbs.,  at  12^''/;  12  eggs,  25''/;  10  lbs.  G.  sugar  at  6%^-, 
2  lbs.  coffee  at  32^/;   i  sack  pastry  flour,  $1.50;   i  bottle  bluing,  10'/;   i  can  chicken,  40^/-. 

No.  -4. — Mrs.  A.  Waldron,  i  can  chicken,  40'/;  i  bunch  celery,  i^i-,  i  bottle  O.  oil, 
75'/';   I  5-lb.  can  coffee,  $1.50;   i  lamp,  50^^';  5  gals.  K,  oil  at  13^/;   i  clotheshne,  30^'. 

No.  5. — Mrs.  F.  Gilford,  i  brl.  N.  S.  flour,  $5.75;  i  can  tongue,  75^;  5  bars  I.  soap 
at  5^';   I  bottle  ketchup,  22'/;   10  lbs.  G.  sugar  at  6^^'.  ; 

No.  6. — Chas.  A.  Dodge,  5  lbs.  lard  at  i2^/;  i  ham,  15  lbs.,  at  12 J^^-;  5  gals.  K.  oil 
at  13^/;   I  box  cigars,  $2.50;   i  broom,  35'/;   12  eggs,  25'/;   12  bananas,  25^'. 

No.  7. — Mrs.  S.  T.  Wortheri,  i  cake  Sapolio,  10^/;  2  lbs.  coffee  at  32'/;  5  lbs.  lard  at 
12'/-;   I  brl.  N.  S.  flour,  $5.75;   12  bananas,  25''/'. 

No.  8. — C.  H.  Stratton,  Elm  House,  500  cigars  at  $35  per  M. ;  200  cigars  at  $55  per  M.; 
I  ham,  26  lbs.,  at  i2f;  i  brl.  N.  S.  flour,  $5.50;  6  doz.  S.  F.  eggs  at  22<f-;  20  doz.  case 
eggs  at  16^/;  I  tub  butter,  52  lbs.,  at  22'^';  i  brl.  G.  sugar,  216  lbs.,  at  6'/;  ^  cht.  Y.  H. 
tea,  60  lbs.,  at  ^o<l-. 

No.  9. — Wm.  Harper,  i  sack  pastry  flour,  $1.50;  10  lbs.  tub  butter  at  2^(/-,  2  lbs. 
cheese  at  16'/;  5  gals.  K.  oil  at  13'.';   i  brl.  apples,  $2.50;   12  oranges,  35^/. 

No.  10. — E.  L.  Corey,  i  ham,  16  lbs.,  at  i2%(f-;  20  lbs.  G.  sugar  at  6 J^^/;  i  lamp,  40^/; 
I  5-lb.  can  coffee,  $1.50;  3  gals.  K.  oil  at  15'/. 

No.  11. — P.  J.  McGuire,  Cottage  Hotel,  200  cigars  at  $35  per  M.;  i  brl.  X.  S.  flour, 
$5.50;  I  doz.  T.  ketchup,  $2.00;  i  tub  butter,  50  lbs.,  at  22'/;  %  cht.  Y.  H.  tea,  60  lbs., 
at  40^'-;  5  gals.  K.  oil  at  lyl;   i  lb.  baking  powder,  5051^ 

No.  12. — E.  B.  Woods,  I  sack  pastry  flour,  $1.50;  2  lbs.  Rio  coffee  at  20^/;  5  lbs. 
lard  at  12'/;  i  lb.  chocolate,  30'/;  i  can  tongue,  75''/;  i  bottle  Worcestershire,  40/;  i  pail 
mackerel,  10  lbs.,  $2.25. 

Cash  sales  for  the  day,  $242.36. 


214  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

Received  cash  as  follows:  P.  J.  McGuire,  $50;  Mrs.  A.  Waldroii,  $20;  merchandise 
sales,  per  cash  tickets,  $242.36. 

Had  your  note  at  4  mos.  for  $500,  discounted  at  the  City  Bank,  and  received  cash  for 
the  net  proceeds. 

Deposited  $225. 

Paid  cash  as  follows:  (Checks)  Park  &  Tilford,  invoice  of  15th,  $287.90,  less  y^;  St. 
Louis  Milling  Co.,  invoice  of  15th,  $450,  less  5'r.  (Currency)  Gra)^  Bros.,  $47;  goods 
from  market  wagons,  $15.30;  freight  and  cartage,  $11.32;  salaries,  Canfield,  $12;  Stuart, 
$12;   Marsh,  $20. 

Balance  your  cash  book. 

October  29,   190-. 

Purchased  of  Williams  &  Andrews,  City,  for  cash,  2  bxs.  oranges  at  $3.50;  2  bxs. 
lemons  at  $3;  4  tubs  Cr.  butter,  240  lbs.,  at  igi;  5  bxs.  cheese,  252  lbs.,  at  ii^'-. 

Purchased  of  Cobb,  Bates  &  Yerxa,  Boston,  subject  to  sight  draft  in  10  days,  mer- 
chandise as  per  invoice,  $262.74. 

Bought  of  Park  &  Tilford,  New  York,  net  60,  2/10,  merchandise  as  per  invoice,  $68.74. 

Bought  of  F.  H.  Leggett,  New  York,  net  4  mos.,  3  10,  merchandise  as  per  invoice, 
$168.94. 

Purchased  of  S.  S.  Pierce  &  Co.,  Boston,  net  60,  3  10,  merchandise  as  per  invoice, 
$88.45. 

Purchased,  for  cash,  country  produce  amounting  to  $16.42. 

The  following  sales  slips  have  been  handed  in  b}^  the  salesmen. 

No.  1. — K.  B.  Woods,  20  lbs.  tub  butter  at  22'/;  15  lbs.  G.  sugar  at  6]/2<;\  5  gals.  K. 
oil  at  13'/;   yi  cht.  Y.  H.  tea,  15  lbs.,  at  40^';   i  lb.  baking  powder,  50;/. 

No.  2. — P.  J.  McGuire,  Cottage  Hotel,  2  hams,  47  lbs.,  at  12'/;  i  brl.  oatmeal,  $4.75; 
I  case  Cr.  of  Wheat,  36  pkgs.,  at  12^^/;  6  brooms  at  25'/;  6  doz.  oranges  at  25'';  3  doz. 
lemons  at  20/. 

No.  3. — E.  ly.  Corey,  i  gal.  maple  syrup,  $1.25;  5  bu.  potatoes  at  60/;  i  broom,  35V; 
I  can  ox  tongue,  75';';   i  bx.  mustard,  15/. 

No.  4. — Wm.  Harper,  i  ham,  18  lbs.,  at  i2>^';';  3  cans  peaches,  50';  5  lbs.  coffee  at 
30/;   10  lbs.  G.  sugar  at  6^^'/;   i  bx.  gelatine,  15'/;    12  oranges,  35'/. 

No.  5. — C.  H.  Stratton,  Elm  House,  i  tul)  lard,  54  lbs.,  at  10^  ;  20  lbs.  print  butter 
at  23^/;  10  doz.  S.  F.  eggs  at  24^;  i  case  Germea,  36  pkgs.,  at  i2%<:;  12  bxs.  sardines  at 
25'/;  I  bx.  lemons,  $4.50;  i  brl.  pastry  flour,  $6;  i  ham,  24  lbs.,  at  i2<l;  %  cht.  E.  B. 
tea,  15  lbs.,  at  50/. 

No.  «. — Mrs.  S.  T.  Worthen,  20  lbs.  G.  sugar  at  6%<l;  5  lbs.  Y.  H.  tea  at  45'  ;  i  can 
ox  tongue,  75''/;  6  lemons,  15'/;  5  gals.  K.  oil  at  13'/. 

No.  7.— A.  B.  Ryder,  yi  cht.  E.  B.  tea,  15  lbs.,  at  50'/;  i  bu.  potatoes,  60'/;  12  S.  F. 
eggs,  26^/;   I  lamp  chimney,  lo'/;    i  can  tomatoes,  lo'/;   i  ham,  14  ll)s.,  at  12%>I\ 

No.  8. — Mrs.  Wm.  Hanson,  i  Ijrl.  N.  S.  flour,  $5.75;  25  lbs.  oatmeal  al  ^<' \  i  pail 
mackerel,  10  lbs.,  $2.25;  i  brl.  api:)les,  $2.50;  20  lbs.  G.  sugar  at  6>j'/;  5  gals.  K.  oil  at  ly/. 

No.  i). — Edward  Austin,  12  S.  F.  eggs,  26'/;  5  lbs.  E.  B.  tea  al  50',';  10  ll)s.  tub  butter 
at  22'/'-;   I  bx.  mustard,  15'/;   2  cans  corn  at  10/. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  215 

No.  10. — Mrs.  A.  Waldron,  3  lbs.  print  butter  at  26^';  i  sack  pastry  flour,  $1.50;  i  ham, 
12  lbs.,  at  12^^/;   10  lbs.  G.  sugar  at  6^^/;   i  gal.  molasses,  40^'';   i  lb.  baking  powder,  50^'. 

No.  11. —  Mrs.  F.  Gilford,  5  gals.  K.  oil  at  13/;  i  brl.  apples,  $2.75;  5  lbs.  coffee  at 
3o/';   I  lamp,  35'/;   i  broom,  30/;   J^  gr.  matches,  25^/. 

No.  12. — Chas.  A.  Dodge,  12  S.  F.  eggs,  26^;  i  lb.  coffee,  32^/;  i  brl.  apples,  $2.50. 
I  wash  tub,  $1.10;   I  lb.  chocolate,  30'/. 

Cash  sales  for  the  day,  $216.48. 

Received  cash  as  follows:  P.  J.  McGuire,  $50;  Mrs.  A.  Waldron,  $10;  merchandise 
sales,  per  cash  tickets,  $216.48. 

Deposited  $150. 

Paid  cash  as  follows:  (Checks)  Williams  &  Andrews,  invoice  of  even  date,  $86.32; 
5  tons  coal,  $25.  (Currency)  salaries,  Canfield,  $12;  Stuart,  $10:  Marsh,  $20;  country 
produce,  $16.42;  freight,  $6.88. 

Gave  S.  S.  Pierce  &  Co.,  Boston,  your  note  at  20  days,  dated  Oct.  25th,  with  interest, 
for  amount  of  invoice  of  Oct.  15th,  less  2^.      (Enter  in  journal  and  bill  book.) 

Balance  your  cash  book. 

POSTING, 

You  may  now  post  your  books.  Remember  that  in  single  entry  you  post  only  such 
transactions  as  affect  personal  accounts,  and  that  only  personal  accounts  appear  in  either 
the  general  or  the  card  ledger. 

The  card  ledger  debits  will  be  taken  entirely  from  the  statement  sheets  of  the  ledgerette 
file.  Remove  these  statements  from  the  file,  and  post  only  the  totals  to  the  corresponding 
cards  of  the  card  ledger,  placing  the  date  of  each  sales  sheet  in  the  explanation  space  (see 
model  ledger  card,  page  207). 

The  card  ledger  credits  will  be  found  on  the  debit  side  of  the  cash  book  and  in  the 
journal.  Turn  to  your  cash  book  and  post  all  cash  debits  which  have  been  received  from 
persons  whose  names  appear  in  the  card  ledger  (see  form,  page  204).  Place  a  check  mark 
against  each  name  in  the  cash  book.  Turn  to  your  journal  and  post  any  items  which  may 
affect  customers'  accounts,  placing  a  check  mark  against  each  item  to  indicate  posting. 

Your  own  account  and  the  accounts  with  those  business  houses  of  whom  you  purchase 
goods,  and  all  other  personal  accounts,  except  those  with  customers,  will  be  found  in  the 
general  ledger,  and  the  postings  to  these  accounts  will  be  made  from  the  journal,  the 
purchase  book,  and  the  cash  book.  Open  accounts  in  ^'our  general  ledger  as  follows, 
allowing  one-third  page  to  each  account:  Page  i,  j^our  own  account.  Page  2,  Adams  & 
Hackland,  Hackett  Bros.,  E.  J.  Dunn  Grocer}^  Co.  Page  3,  American  Sugar  Refining 
Co.,  S.  M.  Crockett  &  Co.,  Park  &  Tilford.  Page  4,  S.  S.  Pierce  &  Co.,  St.  Louis 
Mining  Co.,  F.  H.  Leggett  &  Co.     Page  5,  Cobb,  Bates  &  Yerxa. 

Post  from  the  purchase  book  the  amount  of  each  on  account  invoice  to  the  credit  of 
the  account  named;  then  post  from  the  journal  and  the  cash  book  such  items  as  should 
be  carried  to  these  accounts.     Place  check  mark  against  each  cash  item. 

Having  completed  your  posting,  make  an  abstract  of  your  card  ledger,  showing  the 
amount  due  from  each  customer. 

From  your  bill  book  find  the  notes  receivable  in  your  possession,  and  from  your  cash 
book  find  the  amount  of  cash  on  hand. 


216 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


From  your  general  ledger  find  the  amounts  due  your  creditors,  and  from  your  bill 
book  find  the  notes  j'ou  have  outstanding. 

Your  inventory  shows  the  following  results. 

Merchandise  on  hand,  valued  at  $4400.63, 
Ofiice  safe,  etc.,  "       "       125.00. 

From  the  above  data  prepare  a  statement  of  resources  and  liabilities,  according  to  the 


following  model. 


Statement  of  Resources  and  Liabilities. 


Resources. 

Cash,  balance  on  hand, 

Merchandise,  per  inventory, 

Office  safe  and  fixtures, 

Accounts  receivable,  per  card  ledger,  as  under: 

Mrs.  S.  T.  Worthen, 

A.  B.  Rvder, 

C.  H.  Stratton, 

Mrs.  Wm.  Hanson, 

Wm.  Harper, 

Edward  Austin, 

Edward  L.  Corey, 

Mrs.  A.  Waldron, 

P.  J.  McGuire, 

Mrs.  Fred  Gilford, 

E.  B.  Woods, 

Chas.  A.  Dodge. 
Notes  receivable,  per  biU'book, 


Liabilities. 

Accounts  payable,  per  general  ledger  as  under: 

Adams  &  Hackland, 

American  Sugar  Refining  Co., 

Park  &  Tilford, 

S.  S.  Pierce  &  Co., 

F.  H.  Leggett&Co., 

Cobb,  Bates  &  Yerxa, 
Notes  payable,  per  bill  book. 

Present  Worth,* 


% 

■     • 

■-- 

Find  the  net  gain  or  the  net  loss  according  to  the  form  given  below, 


Proprietor's  Statement. 


(Student), 


invested 
withdrew 
net  investment 
present  worth 

net  lubfi* 


l.  ■ 

1 

$.  .■ 

MODERN    ILLUSTRATIVE    BOOKKEEPING.  217 

CONTINUATION    OF   OCTOBER   BUSINESS 

The  business  of  the  past  month  has  shown  a  small  loss,  but  as  the  sales  are  increasing, 
you  have  decided  to  continue  the  business  and  take  a  partner,  J.  M.  Marsh,  your  present 
delivery  clerk,  and  to  add  a  department  of  meats,  fish  and  poultry  to  your  grocery  business. 

J.  M.  Marsh  invests  as  follows: 

Note  in  his  favor,  dated  Sept.  4th,  at  four  months  from  date,  signed  by  Charles  A. 
I^awrence,  indorsed  by  E.  W.  Lynch.  Face  of  note,  $942.68;  discount  for  unexpired 
time,  $ ;  net  value  of  note,  $ . 

Note  in  his  favor,  dated  Sept.  19th,  at  four  months,  with  interest,  signed  by  George 
M.  Kelly,  indorsed  by  Wm.  H.  Kelly  &  Co.  Face  of  note,  $622.85;  interest  due  on  note 
to  date,  $ ;  value  of  note  and  interest,  $ . 

Horse,  wagon,  and  harness,  now  used  for  delivering  goods,  valued  at  $250. 

Cash,  sufficient  to  make  his  investment  equal  your  own  worth,  as  shown  by  your 
statement  of  Oct.  31st. 

Draw  up  articles  of  copartnership,  showing  investments  of  each  partner,  and  containing 
the  following  conditions. 

(Student)  shall  act  as  bookkeeper  and  cashier,  and  shall  have  general  charge  of  the 
inside  management  of  the  store;  shall  receive  all  cash,  sign  all  notes,  checks,  and  other 
negotiable  paper  of  the  firm,  and  attend  to  the  purchase  of  all  groceries. 

J.  M.  Marsh  shall  have  charge  of  the  delivery  of  goods,  the  taking  of  orders,  wdth  such 
assistance  as  may  be  necessary,  and  shall  attend  to  the  buying  of  all  country  produce  and 
provisions. 

Bach  partner  shall  give  his  entire  time  to  the  business,  and  shall  be  entitled  to  draw, 
for  living  expenses,  cash  not  to  exceed  $100  per  month,  or  its  equivalent  in  goods  from 
the  store  at  cost. 

The  profits  and  losses  of  the  business  shall  be  divided  equally  at  the  end  of  each  year, 
or  at  such  period  as  the  books  may  be  closed. 

Make  a  bill  of  sale,  disposing  of  your  entire  resources  to  the  firm  of  (Student)  &  Marsh, 
subject  to- the  payment  of  your  liabilities,  as  shown  by  your  statement  of  Oct.  31st,  the 
consideration  being  the  two  notes,  horse,  wagon,  harness,  and  cash  invested  by  Marsh. 

It  has  been  decided  to  keep  the  books  by  double  entry  from  this  date.  No  new  books 
will  be  required. 

INSTRUCTIONS   FOR  CHANGING   FROM    SINGLE  TO   DOUBLE   ENTRY, 

Turn  to  your  statement  of  resources  and  liabilities.  Open  an  account  with  Merchan- 
dise, carrying  to  the  debit  side  the  amount  of  your  inventory.  Open  an  account  w'ith 
Furniture  &  Fixtures,  carrying  to  the  debit  side  the  value  of  the  safe  and  furniture. 
Open  an  account  wdth  Bills  Receivable ,  carrying  to  the  debit  side  the  amount  of  C.  H. 
Stratton's  note.  Open  an  account  with  Bills  Payable,  placing  on  the  credit  side  the  total 
amount  of  notes  outstanding.  Enter  the  loss,  as  shown  by  the  statement  of  your  own 
account,  Oct.  31st,  on  the  debit  side  of  your  ledger  account,  with  the  explanation.  Net 
Loss,  in  red  ink.  Close  the  account,  and  bring  down  your  present  worth  to  the  credit 
side,  under  date  of  Nov.  ist. 

Take  a  trial  balance,  including  the  balance  of  cash,  as  shown  in  j'our  cash  book,  and 
the  balances  of  customers'  accounts,  as  shown  in  your  card  ledger;  the  debits  and  credits 


218  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

should  be  equal.  Your  books  are  now  read}'  to  be  kept  by  double  entrj-  in  the  following 
transactions. 

The  footing  of  the  Amount  of  Invoice  column  of  the  purchase  book  should  be  posted 
to  the  debit  of  Merchandise  at  the  end  of  the  month,  as  it  contains  all  purchases  of  mer- 
chandise. The  footing  of  the  Monthly  Sales  column  of  the  abstract  sales  book  should  be 
posted  to  the  credit  of  Merchandise,  as  it  contains  all  the  sales  of  merchandise. 

In  your  cash  book  you  should  enter  in  the  first  space  the  name  of  the  account  affected, 
and  in  the  second  space  the  explanation,  as  in  the  cash  book  of  July,  pages  136  and  137. 

In  the  journal  proceed  as  in  double  entry  journal,  pages  6  and  7. 

Make  a  journal  entry,  showing  the  conditions  of  the  partnership,  and  debit  and  credit 
such  accounts  as  are  affected  by  these  transactions. 

You  are  now  read)'  to  proceed  with  the  work  of  November. 


WORK   FOR  THE   STUDENT. 
November  i,   190-. 

Engage  Geo.  Carter  as  meat  cutter,  at  $15  per  week,  and  Willis  Holt  as  driver  and 
order  clerk,  at  $15  i:)er  week. 

Purchased  of  Armour  &  Co.,  Chicago,  3ods.,  2    10,  dressed  meat,  as  per  invoice,  $132.21. 

Purchased  of  Swift  &  Co. ,  Chicago,  30  ds. ,  2  10,  beef,  mutton  and  lard,  as  per  invoice, 
$142.38. 

Bought  of  Gray  Bros.,  City,  for  cash,  5  tubs  butter,  212^^  lbs.,  at  2o;/-;  2  bxs.  cheese, 
104  lbs.,  at  \\'l\ 

Bought  of  E.  J.  Dunn  Grocery  Co.,  Cit}-,  4  mos.,  5  10,  2  hf.  chts.  Japan  tea,  120  lbs., 
at  25'/;  2  hf.  chts.  E.  B.  tea,  120  lbs.,  at  32^/;  2  bales  Mocha  coffee,  300  lbs.,  at  25^';  2 
mats  Java  coffee,  150  lbs.,  at  26'/;   i  pail  cinnamon,  25  lbs.,  at  2^1 . 

Purchased  of  M.  S.  Newton  &  Sons,  Boston,  30  ds.,  2    10,  fish,  as  per  invoice,  $18.39. 

Bought  country  produce  from  market  wagons,  for  cash,  $18.44. 

The  following  sales  slips  have  been  handed  in  by  the  salesmen. 

No.  1. — Chas.  A.  Dodge,  8  lbs.  rib  roast  at  16;';  20  lbs.  G.  sugar  at  6J^(.  ,•  12  lemons, 
25'/;   I  brl.  Graham  flour,  $5.25;   i  bx.  macaroni,  35f ;   i  bottle  Worcestershire,  40'/. 

No.  2. — Thomas  B.  Tucker,  Tucker's  Tavern,  10  lbs.  porterhouse  at  22'/;  6  lbs.  lamb 
chops  at  16/;  22  lbs.  ham  at  12'/;  6  do/..  S.  F.  eggs  at  25'/;  12  lbs.  fish  at  10'.';  5  bu. 
potatoes  at  60;/;   i  case  Germea,  36  pkgs.,  at  12'/. 

No.  8. — Mrs.  Fred  Gilford,  7  lbs.  pork  roast  at  12/;  20  lbs.  tub  butter  at  24^-;  i  sack 
Graham  flour,  $1.25;   %  lb.  cinnamon  at  50'/;  V2  bu.  beans  at  $3;  i  bottle  T.  ketchup,  22'/-. 

No.  4. — E.  B.  Woods,  12  lbs.  turkey  at  iS ';  i  (jt.  oysters,  4o;'';  i  can  Java  coffee,  10 
lbs.,  at  30^/;   I  gal.  molasses,  50;';   i  lb.  cocoa,  55'/;  3  doz.  S.  F.  eggs  at  28'/. 

No.  t>. — Mrs.  Wm.  Hanson,  i  tub  l)tilter,  42  lbs.,  at  22c';  4  do/.  S.  F.  eggs  at  28'/;  8 
i"bs.  pork  roast  at  \^<l'\  10  lbs.  beef  roast  at  id'!;  5  ll)s.  round  skak  at  14'-;  5  llis.  Java 
coffee  at  30;';    i  case  C.  peas,  36  cans,  at  \2<!\ 

No.  <>. — Wm.  Harper,  7  lbs.  land)  at  16';  5  Im.  potatoes  at  60'  ;  1  sack  Graham  Hour, 
$1.25;   I  gal.  maple  syrup,  $1.25;   5  ll)s.  i)riiit  butter  at  28'/;   i  bottle  capers,  30'/-. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  219 

No.  7. — E.  L.  Corey,  8  lbs.  corned  beef  at  12^/;  20  lbs.  tub  butter  at  24^-;  i  sack  pastry 
flour,  $1.50;   I  bx.,  12  lbs.,  prunes,  at  12'r,   i  lb.  baking  powder,  50^/;   i  lid.  cabbage,  lo/-. 

Xo.  8. — James  B.  Longle}-,  Star  Restaurant,  10  lbs.  sirloin  steak  at  iS';'';  12  lbs.  porter- 
house steak  at  20'/;  i  ham,  24  lbs.,  at  iif;  6  doz.  S.  F.  eggs  at  25';';  i  doz.  T.  ketchup, 
$2,25;   I  doz.  Crown  olives,  $3;   18  lbs.  turkey  at  16 f. 

No.  9. — A.  B.  Ryder,  6  lbs.  veal  roast  at  18'/;  i  qt.  oysters,  40'/;  3  bu.  potatoes  at 
6oi;  20  lbs.  G.  sugar  at  6^'/;  i  sack  buckwheat  flour,  $1;  i  gal.  maple  syrup,  $1.25;  i 
lb.  baking  powder,  5o/'. 

No.  10. — C.  H.  Stratton,  20  lbs.  sirloin  steak  at  I5''/,-  12  lbs.  porterhouse  at  i2><l';  22 
lbs.  sirloin  roast  at  i^i';  10  lbs.  pork  roast  at  i2'i'-,  39  lbs.  turkey  at  i5''/-;  i  brl.  N.  S. 
flour,  $5.50;  I  brl.  Graham  flour,  $4.75;  5  gals,  maple  syrup  at  $1.15;  i  sack  buckwheat 
flour,  $1;   I  hf.  cht.  Japan  tea,  60  lbs.,  at  35^'. 

No.  11. — Mrs.  S.  T.  Worthen,  i  jDr.  chickens,  9  lbs.,  at  i6f]  i  bu.  potatoes,  6o'r,  24 
lbs.  tub  butter  at  25'  ;   i  lb.  baking  powder,  50^'. 

No.  12. — P.  J.  McGuire,  10  lbs.  sirloin  at  i6/-;  5  doz.  S.  F.  eggs  at  28f ;  200  cigars 
at  $35  per  M.;   100  cigars  at  $55  per  M.;   15  lbs.  chicken  at  i^C-,  6  lbs.  ox  tongue  at  20^'. 

Knter  the  sales  on  customers'  monthly  statement  sheets  exactly  as  in  October. 

Cash  sales  for  the  day,  $321.45. 

Your  cash  book  now  becomes  the  ordinary  double  entry  cash  book,  and  you  must  give 
the  name  of  each  account  affected  by  any  transaction,  the  same  as  in  cash  books  of  May, 
June  and  July.  Where  merchandise  sales  or  purchases  are  made,  place  a  check  mark  in 
the  ledger  folio  column  of  the  cash  book  opposite  Merchandise ,  as  these  amounts  are  posted 
to  the  Merchandise  account  from  the  purchase  book  and  the  abstract  sales  book,  and  not 
from  the  cash  book. 

Received  cash  as  follows:  Investment  of  J.  M.  Marsh,  $578.37;  Mrs.  F.  Gilford, 
payment  of  October  account,  $24.25;  E.  B.  Woods,  on  account,  $25;  Mrs.  A.  Waldron, 
balance  of  September  account,  $9.48;  merchandise  sales,  per  cash  tickets,  $321 .45.  (Enter 
these  amounts  on  the  debit  side  of  your  cash  book.) 

Deposited  $800. 

Paid  cash  as  follows:  (Checks)  Adams  &  Hackland,  on  account,  $100;  American 
Sugar  Refining  Co.,  invoice  of  Oct.  22d,  less  i<;  F.  H.  Leggett  &  Co.,  invoice  of  Oct. 
22d,  less  3^;  Gray  Bros.,  Cit}^  invoice  of  even  date,  $53.94.  (Make  entries  the  same  as 
in  previous  double  entry  cash  books.)  (Currency)  merchandise  from  market  wagons, 
$18.44;  stamps  and  postals,  $2.50;  replacing  broken  window,  $4.75;  freight,  $2.17  (debit 
Freight);  salaries,  Canfield,  $6;  Stuart,  $6  (debit  Salaries). 

(Student)  drew  for  private  use,  cash,  $25.     Marsh  drew  for  private  use,  cash,  $20. 

Gave  S.  S.  Pierce  &  Co.  note  at  30  ds.,  with  interest,  to  pay  invoice  of  Oct.  22d,  less 
2,<.      (Enter  in  journal  and  bill  book.) 

Balance  your  cash  book. 

No\rEMBER  8,   1 90-. 

Purchased  of  Hackett  Bros.,  City,  60  ds.,  2  10,  10  brls.  K.  oil,  642  gals.,  at  g%(l-,  i 
hhd.  Golden  Drip  sj^rup,  96  gals.,  at  37^^/;  2  brls.  salt  pork  at  $6.25. 

Bought  of  S.  M.  Crockett  &  Co.,  60  ds.,  3  10,  5  gross  bluing  at  $7.25;  i  gross  T. 
ketchup,  144  bottles,  at  11^/;  36  one-gallon  cans  M.  syrup  at  95^/. 


220  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

Bought  of  Gray  Bros.,  City,  net  30,  2  10,  5  cases  eggs,  60  doz.,  at  15'/;  130  lbs. 
turkey  at  I3':/';  65  lbs.  chicken  at  i2'l-. 

Purchased  from  market  wagons,  for  cash,  $28.65. 

Purchased  of  American  Sugar  Refining  Co.,  New  York,  net  30,  i  10,  invoice  amount- 
ing to  $69.98. 

Bought  of  Armour  &  Co.,  Chicago,  net  30,  2,/ 10,  invoice  of  pork  and  sausage,  $98.37. 

Bought  of  Swift  &  Co.,  Chicago,  net  30,  2/10,  invoice  of  beef  and  mutton,  $102.40. 

Purchased  of  M.Newton  &  Sons,  Boston,  net  30,  2/10,  invoiceof  fish  and  oysters,  $19.69. 

The  following  sales  slips  have  been  handed  in  by  the  salesmen. 

Xo.  1. — E.  L.  Corey,  6  lbs.  chicken  at  i^'t;  %  brl.  Graham  flour  at  $5.50;  i  gal. 
maple  syrup,  $1.25;  J^  bu.  beans,  80^/;  5  gals.  K.  oil  at  13'/;  12  lbs.  G.  sugar  at  65^<-;  i 
gal.  pickles,  50'/. 

No.  2. — Wm.  Harper,  10^  lbs.  chicken  at  i6'/,-  i  brl.  pastry  flour,  $6;  2  doz.  case 
eggs  at  22^/;  12  oranges,  2>5'l'\  i  bottle  extract  vanilla,  40'/;  2  pkgs.  shredded  wheat, 
25f-;   I  broom,  35^/. 

No.  3. — Mrs.  Wm.  Hanson,  6  lbs.  pork  chops  at  12'/;  8  lbs.  round  steak  at  i^C;  12 
lbs.  sirloin  roast  at  15^/;  11 J^  lbs.  pork  roast  at  12'/;  i  brl.  pastry  floiu",  $6;  3  doz.  bananas 
at  2o7;   I  gal.  vinegar,  25^'-. 

No.  4. — Mrs.  S.  T.  Worthen,  8  lbs.  sirloin  roast  at  20^/;  %  brl.  G.  flour,  $2.75;  12  S. 
F.  eggs,  28'/';  2  lbs.  cheese  at  16'/;   i  5-lb.  can  Java  coffee,  $1.50;   12  lemons,  25^-, 

.  No.  5. — Edward  Austin,  2  lbs.  round  steak  at  16'/;  8  lbs.  corned  beef  at   i2'.'-;   i  hd. 
cabbage,  lof;   i  bu.  potatoes,  6o':/-;   %  cht.  E.  B.  tea,  15  lbs.,  at  ss'/;   i  bottle  T.  ketchup, 

24^/;   12  eggs,  28^/. 

« 

No.  6. — Mrs.  A.  Waldron,  8  lbs.  lamb  roast  at  16'/;  20  lbs.  G.  sugar  at  6J4>/;  5  lbs.  tub 
butter  at  25'/';  i  brl.  Graham  flour,  $5.25;  i  gal.  pickles,  50^/;  2  pkgs.  shredded  wheat,  25^'. 

No.  7. — Chas.  A.  Dodge,  9  lbs.  turkey  at  16/;  2  qts.  cranberries  at  lo'/';  i  bu.  potatoes, 
6o/-;   12  case  eggs,  22'/;   i  box  cigars,  $5.50;   i  gal.  vinegar,  25^/. 

No.  8. — James  B.  I^ongley,  i  sack  buckwheat  flour,  $1.50;  i  gal.  M.  syrup,  $1.25;  5 
gals.  S.  pickles  at  40^/;  i  brl.  K.  oil,  42  gals.,  at  ih/;  20  lbs.  chicken  at  14^/;  28  lbs.  rib 
roast  at  14^/;  16  lbs.  pork  roast  at  iv/;  15  lbs.  sirloin  roast  at  15'/;  17  lbs.  porterhouse  at 
i8r/-. 

No.  9. — Mrs.  F.  Gilford,  g^  lbs.  turkey  at  ib'l;  i  qt.  oysters,  40'/;  20  lbs.  G.  sugar 
at  6%'l-;   I  bu.  potatoes,  60^/;    i  lb.  baking  powder,  50/;   12  oranges,  35/. 

No.  10. — P.  J.  McGuire,  10  lbs.  sirloin  roast  at  16'/;  20  lbs.  rib  roast  at  i^f;  10  lbs. 
pork  roast  at  12'/;  16  lbs.  turkey  at  i67;  i  hv\.  N.  S.  flour,  $5.50;  i  l)rl.  pastry  flour, 
$5.75;   I  doz.  T.  ketchup,  $2;  6  doz.  oranges  at  25^/. 

No.  11. — E.  B.  Woods,  11^  lbs.  sirloin  roast  at  16:';  5  bu.  E.  R.  potatoes  at  55'.';  i 
brl.  apples,  $2.75;  10  11)S.  lard  at  121^'/;  20  lbs.  G.  sugar  at  6^'/;  i  bottle  bluing,  lof-, 
^  brl.  G.  flour  at  $5.50. 

No.  lii. — Thomas  B.  Tucker,  12  doz.  S.  F.  eggs  at  26/;  15  lbs.  sirloin  steak  at  16/; 
I  brl.  N.  S.  flour,  $5.50;  i  brl.  pastry  flour,  $5.75;  i  brl.  oatmeal,  $5.25;  i  sack  buck- 
wheat, $1.50;  5  gals.  M.  syrup  at  $1.15. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  221 

No.  13. — C.  H.  Stratton,  22  lbs.  porterhouse  at  18^/;  31  lbs.  beef,  sirloin,  at  i^f;  26 
lbs.  lamb  at  15'/;  12  lbs.  pork  chops  at  10^/;  10  bu.  potatoes  at  ^^'t)  i  mat  Java  coflfee,  75 
lbs.,  at  28'/;  48  lbs.  butter  at  2^'l-;  30  doz.  case  eggs  at  iSf. 

Cash  sales  for  the  day,  $388.74. 

Received  cash  as  follows:  A.  B.  Ryder,  October  account,  $38.30;  Mrs.  S.  T.  Worthen, 
on  account,  $15;  P.  J.  McGuire,  balance  of  September  account,  $19.34;  1"-  B.  Tucker,  on 
account,  $30;  merchandise  sales  per  cash  tickets,  $388.74. 

Had  the  note  of  E.  W.  Lawrence  discounted  at  the  City  Bank,  and  received  credit  for 
the  net  proceeds.     Face  of  note,  $942.68;  discount,  $ ;  aiuount  credited,  $ . 

Deposited  $300. 

Paid  cash  as  follows:  (Checks)  Cobb,  Bates  &  Yerxa,  draft  at  sight  for  invoice  of 
Oct.  29th;  Park  &  Tilford,  invoice  of  Oct.  29th,  less  2^)  F.  H.  Leggett  &  Co.,  invoice 
of  Oct.  29th,  less  3.^;  Armour  &  Co.,  invoice  of  Nov.  ist,  less  2<;  Swift  &  Co.,  invoice 
of  Nov.  ist,  less  2fc;  M.  S.  Newton  &  Sons,  invoice  of  Nov.  ist,  less  2^';  bay  horse,  $125 
(debit  Horse,  Wagoji  &  Harness  account);  delivery  wagon,  $100.  (Currency)  merchan- 
dise from  market  wagons,  $28.65;  cleaning  windows,  $1.25;  board  of  horse,  $5;  harness, 
$31;  freight,  $1.96;  salaries,  Canfield,  $12;  Stuart,  $12;  Carter,  $15;  Holt,  $15. 

Receiv-ed  of  C.  H.  Stratton  his  note  at  60  ds.,  with  interest  added,  to  settle  October 
account.     Amount  of  account,  $266.09;  interest,  60  ds.,  $ ;  face  of  note,  $ . 

Returned  to  E.  J.  Dunn  Grocery  Co.,  i  bale  Mocha  coffee,  150  lbs.,  at  25'/.  Too  much 
of  this  kind  was  ordered. 

Balance  your  cash  book. 

November  15,   190-. 

Purchased  of  Armour  &  Co.,  Chicago,  net  30,  2    10,  invoice  amounting  to  $116.20. 
Purchased  of  Swift  &  Co.,  Chicago,  net  60,  3    10,  invoice  amounting  to  $178.95. 
Bought  of  M.  S.  Newton  &  Sons,  Boston,  net  30,  2    10,  invoice  amounting  to  $28.44. 
Bought  of  S.  S.  Pierce  &  Co.,  Boston,  60  ds.,  3/10,  invoice  amounting  to  $246.39. 
Purchased  of  Park  &  Tilford,  New  York,  net  30,  2    10,  invoice  amounting  to  $63.44. 
Bought  of  Cobb,  Bates  &  Yerxa,  Boston,  acceptance  30  ds.  from  date,  invoice  amount- 
ing to  $213.42. 

Bought  merchandise  from  market  wagons,  for  cash,  $63.42. 

The  following  sales  slips  have  been  handed  in  by  the  salesmen. 

No.  1. — C.  H.  Stratton,  i  brl.  G.  sugar,  217  lbs.,  at  6/';  i  brl.  N.  S.  flour,  $5.50;  i 
brl.  pastry  flour,  $5.75;  i  bx.  oranges,  $4.75;  20  doz.  S.  F.  eggs  at  25^/;  20  lbs.  fresh  fish 
at  11^';  12  lbs.  sirloin  steak  at  i^<l-;  22  lbs.  sirloin  roast  at  15^';  500  cigars  at  $35  per  M.; 
200  cigars  at  $55  per  M. 

No.  2.— A.  B.  Ryder,  8  lbs.  beef  roast  at  16/;  12  S.  F.  eggs,  28'/;  ^  brl.  G.  flour  at 
$5.50;   10  lbs.  lard  at  12^^/;   J^  bu.  beans  at  $3.20. 

No.  3. — Wm.  Harper,  i  qr.  lamb,  16  lbs.,  at  15'/;  10  lbs.  lard  at  12^^/;  6  lemons,  15  '; 
12  S.  F,  eggs,  25^/;  2  lbs.  cheese  at  i6/-;   i  sack  buckwheat  flour,  $1.25. 

No.  4. — Mrs.  Wm.  Hanson,  5  lbs.  lamb  chops  at  i6f;  18  lbs.  ham  at  ii'.';  8  lbs.  round 
steak  at  14^';  i  case  C.  tomatoes,  36  cans,  at  8/;  i  case  C.  corn,  36  cans,  at  8:';  i  brl.  G. 
flour,  $5.25;   I  lb.  pepper,  65'/;   i  lb.  ginger,  60'/. 


222  MOAERN    ILLUSTRATIVE    BOOKKEEPING. 

No.  5. — Edward  Austin,  2  lbs.  halibut  at  20'.';  6  lbs.  sirloin  roast  at  i6';'-;  20  lbs.  G. 
sugar  at  6>^'/;  12  S.  F.  eggs,  28'/-;  i  brl.  apples,  $2.75;  i  bottle  T.  ketchup,  24'. ;  i  lamp, 
4O0. 

No.  6. — Thomas  B.  Tucker,  i  tub  butter,  42^^  lbs.,  at  22'.';  i  cheese,  28^2  lbs.,  at 
12%4-,  I  case  C.  tomatoes,  36  cans,  at  8^/;  i  case  C.  corn,  36  cans,  at  8'/;  i  case  C.  peas, 
36  cans,  at  i2%<r,  22^  lbs.  fresh  fish  at  12'/;  26%  lbs.  chicken  at  14^';  18  lbs.  sirloin 
steak  at  I5';''-;  24  lbs.  sirloin  roast  at  i^'t. 

Xo.  7. — J.  B.  Longley,  i  brl.  N.  S.  flour,  $5.75;  i  brl.  pastry  flour,  $6;  32 J^  lbs. 
turkey  at  15'/;  21  lbs.  lobster  at  16/';  5  gals,  oysters  at  $1.20;  15  lbs.  codfish  at  125^/; 
I  brl.  G.  sugar,  231  lbs.,  at  6'/-. 

No.  8. — Chas.  A.  Dodge,  6}i  lbs.  veal  roast  at  ibf;  12  lbs.  G.  sugar  at  6>^'/';  12  S.  F. 
eggs,  28^/;   I  bx.  dried  peaches,  10  lbs.,  at  i^f!-\    ]4.  gf-  matches,  25'.'-. 

No.  9. — Mrs.  A.  Waldron,  9^  lbs.  turkey  at  16/;  10  lbs.  lard  at  12  J^^/;  i  gal.  vinegar, 
25'/-;   I  lb.  E.  B.  tea,  6of;   1  qt.  pickles,  15'/;  2  lbs.  raisins  at  i^f. 

No.  10. — P.  J.  McGuire,  i  tub  butter,  43 J^  lbs.,  at  22.;  i  tub  lard,  48  lbs.,  at  11^/; 
22^  lbs.  rib  roast  at  14'/;  11^2  lbs.  pork  roast  at  10/;  8  lbs.  sirloin  steak  at  15'/;  i  case 
eggs,  30  doz.,  at  20:';   i  doz.  C.  tomatoes,  $1. 

No.  11. — E.  B.  Woods,  7^  lbs.  chicken  at  15^/;  15  lbs.  tub  butter  at  22^;  3  lbs.  raisins 
at  15^';  2  lbs.  citron  at  207';  2  lbs.  dried  currants  at  125^^/;  8  lbs.  beef  at  8^/. 

No.  13. — Mrs.  F.  Gilford,  4^  lbs.  chicken  at  15';  i  sack  buckwheat  flour,  $1.25;  i 
gal.  M.  sjaup,  $1.25;  5  lbs.  lard  at  12^'/;  i  bx.  dried  apricots,  5  lbs.,  at  20  ;  2  pkgs. 
shredded  wheat,  25^'. 

Cash  sales  for  the  day,  $362.28. 

Received  cash  as  follows:  E.  B.  Woods,  balance  of  account;  Mrs.  A.  Waldron,  on 
account,  $20;  E.  L.  Corey,  to  balance  October  account;  C.  A.  Dodge,  to  balance  October 
account;  James  B.  Eongley,  on  account,  $25;  merchandise  sales,  per  cash  tickets,  $362.28. 

Had  C.  H.  Stratton's  note  of  Oct.  15th  discounted  at  the  City  Bank,  and  net  proceeds 

placed  to  credit.     Face  of  note,  $212.40;  interest,  123  ds.,  $ ;  discount,  92  ds.,  $ ; 

net  proceeds,  $ . 

Deposited,  $400. 

Paid  cash  as  follows:  (Checks)  Adams  &  Hackland,  on  account,  $200;  E.  J.  Dunn 
Grocery  Co.,  invoice  of  Nov.  ist.,  less  5''  (deduct  $37.50,  amount  of  goods  returned); 
note  in  favor  of  S.  S.  Pierce  &  Co.,  due  Nov.  14th,  with  interest;  face  of  note,  $458.95; 

interest,  $ ;  Armour  &  Co.,  invoice  of  Nov.  8th,  less  2':;  American  Sugar  Refining 

Co.,  invoice  of  Nov.  8th,  less  i<;  insuring  stock  of  groceries  and  fixtures  one  year  from 
date;  policy,  $3500;  premium,  r;.  (Currency)  purchases  from  market  wagons,  $63.42; 
shoeing  horse,  $1.25;  board  of  horses,  $10;  salaries,  Canficld,  $12;  Stuart,  $12;  Holt, 
$15;  Carter,  $15;  telegrams  and  telephone  sen-ice,  $1.87;  freight,  $17.42. 

J.  M.  Marsh  drew  cash  for  private  use,  $60.     (Student)  drew  cash  for  private  use,  $50. 

Received  of  P.  J.  McGuire  his  note  at  90  ds.,  with  interest,  to  apjily  on  October  account. 

Accepted  Cobb,  Bates  &  Yerxa's  draft  at  30  ds.  for  the  amount  of  their  invoice  received 
this  da}^ 

Balance  your  cash  book. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  223 

November  22,   190-. 

Bought  of  Gray  Bros.,  Cit}',  60  ds.,  3  10,  92  lbs.  turkey  at  i4'/-;  56  lbs.  chicken  at 
i2}4</]  60  doz.  S.  S.  eggs  at  22'/''. 

Bought  of  Armour  &  Co.,  Chicago,  net  30,  2/10,  invoice  amounting  to  $112.20. 
Purchased  of  Swift  &  Co.,  Chicago,  net  60,  3    10,  invoice  amounting  to  $168.30. 
Piurchased  of  M.  S.  Newton  &  Sons,  Boston,  net  30,  2/10,  invoice  amounting  to  $34.62. 
Bought  merchandise  from  market  wagons,  for  cash,  amounting  to  $46.28. 

The  following  sales  slips  have  been  handed  in  by  the  salesmen. 

No.  1. — Mrs.  A.  Waldron,  2  lbs.  sirloin  at  16'/;  gj4  lbs.  rib  roast  at  14'/;  15  lbs.  G. 
sugar  at  6^^/;   i  bx.  dried  peaches,  10  lbs.,  at  12^/;   i  can  peas,  15'';   i  bu.  potatoes,  60^/. 

No.  2. — P.  J.  McGuire,  2  brls.  Baldwin  apples  at  $2.50;  10  bu.  E.  R.  potatoes  at  55'/; 
24  doz.  case  eggs  at  18  ';  20  hds.  cabbage  at  8; ;  42  lbs.  beef,  sirloin,  at  15/-;  18  lbs.  fresh 
fish  at  12'/;   I  brl.  N.  S.  flour,  $5.50. 

No.  3. — Mrs.  S.  T.  Worthen,  20  lbs.  G.  sugar  at  6%'/;  10  lbs.  lard  at  12^'/-;  12  S.  F. 
eggs,  28^/;  I  brl.  apples,  $2.75;  ^  brl.  pastry  flour  at  $6;  6}4  lbs.  sirloin  roast  at  le^'-;  i 
bottle  bluing,  10;';   i  bx.  stove  polish,  12^/. 

No.  4. — A.  B.  Ryder,  i  bx.  dried  peaches,  10  lbs.,  at  12^;  12  S.  F.  eggs,  28^/;  15  lbs. 
G.  sugar  at  6%t;  9^  lbs.  turkey  at  16'/;   i  bx.  poultry  dressing,  25'/;   i  qt.  oysters,  35'/. 

No.  5. — C.  H.  Stratton,  2  brls.  N.  S.  flour  at  $5.50;  i  brl.  pastry  flour,  $5.75;  2  brls. 
apples  at  $2.50;  i  bx.  oranges,  $4.25;  16  lbs.  sirloin  steak  at  15''';  24  lbs.  sirloin  roast  at 
14^/;   18  doz.  S.  F.  eggs  at  25'/;   i  bu.  beans,  $3. 

No.  6. — Mrs.  Wm.  Hanson,  2  pkgs.  rolled  oats,  25^/;  5  doz.  case  eggs  at  22^/;  25  lbs. 
G.  sugar  at  6J^^/;  12  lbs.  rib  roast  at  14'/;  i  5-lb.  can  Java  coffee,  $1.50;  i  can  E.  B.  tea, 
10  lbs.,  at  50/. 

No.  7. — Wm.  Harper,  9  lbs.  chicken  at  15-;';  4  lbs.  salt  pork  at  lo';  12  S.  F.  eggs, 
28^-;   12  oranges,  35'/;   i  lb.  E.  B.  tea,  60/;   15  lbs.  G.  sugar  at  6^2>'. 

No.  8. — E.  E.  Corey,  2  lbs.  sirloin  steak  at  16  ';  5%  lbs.  veal  roast  at  18/;  i  l)x.  dried 
prunes,  10  lbs.,  at  15:  ;   i  brl.  apples,  $2.75;   i  lb.  chocolate,  40/-. 

No.  9. — T.  B.  Tucker,  25  doz.  S.  F.  eggs  at  24:';  20  bu.  E.  R.  potatoes  at  50'/;  40 
hds.  lettuce  at  2  ;  i  case  Cream  of  Wheat,  36  pkgs.,  at  125^'/;  425^  lbs.  beef,  sirloin,  at 
15^/;   I  hf.  cht.  E.  B.  tea,  50  lbs.,  at  60;';   i  mat  Java  coffee,  75  lbs.,  at  28'/. 

No.  10. — James  B.  Longley,  i  mat  Rio  coffee,  75  lbs.,  at  15/;  i  hf.  cht.  Japan  tea, 
50  lbs.,  at  2,5'/",  2  gal.  oysters  at  $1.25;  i  tub  butter,  40^^  lbs.,  at  22/;  28  lbs.  fresh  fish 
at  12^/;   12  doz.  case  eggs  at  18^/. 

No.  11. — E.  B.  Woods,  I  qt.  oysters,  4o;'';  6  lbs.  pork  loin  at  I2j^9^';  10  lbs.  lard  at 
12}^ f/';   I  lamp,  65^/;   i  lb.  chocolate,  40/;   i  lb.  baking  powder,  50'/. 

No.  12. — Edward  Austin,  8^4  lbs.  corned  beef  at  12:/;  i  hd.  cabbage,  10'/;  5  gals.  K. 
oil  at  13'/;   12  S.  F.  eggs,  28/;   12  oranges,  35'/;   i  5-lb.  can  Java  coffee,  $1.50. 

Cash  sales  for  the  day,  $422. 16. 

Received  cash  as  follows:  Mrs.  S.  T.  Worthen,  balance  of  October  account;  Mrs.  Wm. 
Hanson,  $25,  to  apply  on  account;  Wm.  Harper,  to  balance  October  account:  E.  Austin, 
to  balance  October  account;  T.  B.  Tucker,  $50,  to  apply  on  account;  merchandise  sales, 
per  cash  tickets,  $422.16. 


224  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

Discounted  at  the  City  Bank  G.  M.  Kelly's  note,  dated  Sept.  19th,  at  4  months,  with 

interest.     Face  of  note,  $622.85;  interest,  $ :  discount,  S ;  net  proceeds  placed  to 

credit,  $ . 

Deposited  $400. 

Paid  cash  as  follows:  (Checks)  Hackett  Bros.,  invoice  of  Xov.  8th,  less  2^(;  S.  M. 
Crockett  &  Co.,  invoice  of  Nov.  8th,  less  s'?;  Swift  &  Co.,  invoice  of  Xov.  8th,  less  i"<'. 
(Currency)  board  of  horses,  $10;  railroad  mileage  ticket,  500  miles,  $10;  salaries,  Can- 
field,  $12;  Stuart,  $12;  Holt,  $15;  Carter,  $15;  freight,  $1.45;  purchases  from  market 
wagons,  $46.28. 

Gave  S.  S.  Pierce  &  Co.  our  note  at  60  ds.,  with  interest,  to  paj'  invoices  of  Oct.  29th 
and  Nov.  15th,  less  3<. 

Balance  your  cash  book. 

November  29,   190-. 

Purchased  of  Cobb,  Bates  &  Yerxa,  acceptance  30  ds.,  merchandise  invoiced  at  $182.77. 
Bought  of  Armour  &  Co.,  Chicago,  net  30,  2    10,  invoice  amounting  to  ^83.49. 
Purchased  of  Swift  &  Co.,  Chicago,  net  30,  2    10,  invoice  amounting  to  $87.96. 
Bought  of  M.  S.  Newton  &  Sons,  Boston,  net  30,  2    10,  merchandise  invoiced  at  $28.42. 
Bought  of  S.  S.  Pierce  &  Co.,  Boston,  net  60,  3    10,  invoice  amounting  to  $63.14. 
Purchased  merchandise  from  market  wagons,  for  cash,  $62.46. 

The  following  sales  slips  have  been  handed  in  by  the  salesmen. 

No.  1. — Mrs.  S.  T.  Worthen,  2%  lbs.  sirloin  steak  at  i6f;  i  lb.  ceylon  tea,  80,';  12 
oranges,  35'/';   i  broom,  30/';  2  lbs.  raisins  at  15'/. 

No.  2. — A.  B.  Rj'der,  i  bx.  cigars,  $5.50;  i  brl.  pastry  flour,  $6;  12  oranges,  35'/; 
S%  lbs.  lamb  roast  at  16/;   15  lbs.  G.  sugar  at  6%</-;   12  S.  F.  eggs,  28;/-. 

No.  3. — C.  H.  Stratton,  42^  lbs.  butter  at  24'/;  64  lbs.  turkey  at  15'/;  2  gals,  oysters 
at  $1.20;  I  brl.  G.  sugar,  217  lbs.,  at  6f;  i  case  Cejdon  tea,  50  lbs.,  at  52'/;  22  doz.  S.  F. 
eggs  at  26^'. 

No.  4. — Edward  Austin,  g}4  lbs.  turkey  at  i6f;  %  brl.  pastrj'  flour  at  $6;  12  bananas, 
25/;   I  pkg.  gelatine,  15/;   i  bx.  honey,  22'/. 

No.  5. — E.  L.  Corey,  12%  lbs.  turkey  at  16/;  i  qt.  oysters,  35'/;  i  bx.  cigars,  $3.50; 
I  can  peas,  15'/;   }{  gr.  matches,  25'/;  6  lbs.  loaf  sugar  at  8;.'. 

No.  (i. — P.  J.  McGuire,  200  cigars  at  $55  per  M.;  500  cigars  at  $35  per  M.;  42  lbs. 
lamb  at  i2'/';  i  brl.  G.  sugar,  231  lbs.,  at  6';  22  lbs.  beef,  sirloin,  at  ly'-;  i  mat  Java 
coffee,  75  lbs.,  at  28</. 

No.  7. — Mrs.  A.  Waldron,  i  brl,  pastry  flour,  $6;  20  l])s.  tub  l)uller  at  25/;  6^  lbs. 
veal  roast  at  18'/;   i  can  peas,  15'/;    ]4  lb.  pepper  at  8o;'-;  2  pkgs.  shrctlded  wheat,  25'/. 

No.  8. — Mrs.  Fred  Gilford,  S}^  lbs.  sirloin  roast  at  16/;  i  l)rl.  i)aslr\-  Hour,  $6;  4  lbs. 
dried  peaches  at  12/;   12  S.  F.  eggs,  28/;   i  can  peas,  15/. 

No.  i). — Chas.  A.  Dodge,  %  brl.  pastry  flour  at  $6;  Sy^  lbs.  sirloin  roast  at  16  ;  1  lb. 
cocoa,  40/;  I  5-lb.  can  Java  coffee,  $1.50;  1  qt.  pickles,  15'/';  2  lbs.  cheese  at  16';  5  lbs. 
print  butter  at  30{#. 

No.  10.— T.  B.  Tucker,  i  hf.  chl.  hi  H.  lea,  60  lbs.,  at  50  -  i  gal.  Olive  oil,  $2.50; 
22  lbs.  fresh  fish  at   12^/;  48  lbs.  beef,  sirloin,  at  15'/;    i  do/..  T.  ketchup,  $2;    1    brl.   G. 


MODERN    ILLUSTRATIVE    BOOKKEEPINCx.  295 

sugar,  226  lbs.,  at  6'/;  10  bu.  E.  R.  potatoes  at  55'/;  i  brl.  pastry  flour,  $6;  103  lbs.  winter 
squash  at  2^. 

No.  1 1. — James  B.  Longley,  26  lbs.  lobster  at  16''/;  3  gals,  oysters  at  $1.25;  500  oysters, 
New  York  count,  at  6of  per  C;  52  lbs.  turkey  at  15^/;  i  gal.  Olive  oil,  $2.50;  22  lbs. 
sirloin  steak  at  15^''. 

No.  12. — Mrs.  Wm.  Hanson,  i  brl.  N.  S.  flour,  $5.75;  4  doz.  case  eggs  at  20^;  23^ 
lbs.  turkey  at  155?;  9^  lbs.  fresh  fish  at  i2</-;  i  case  corn,  36 cans,  at  8^/;  i  case  tomatoes, 
36  cans,  at  8/. 

Cash  sales  for  the  day,  $436.98. 

Received  cash  as  follows:  Mrs.  A.  Waldron,  to  balance  October  account;  Mrs.  Wm. 
Hanson,  to  balance  October  account;  J.  B.  Longley,  on  account,  $25;  merchandise  sales, 
per  cash  tickets,  $436.98. 

Sold  one  of  the  horses  used  on  delivery  wagon,  on  account  of  being  too  light  for  service, 
for  $90. 

Had  C.  H.  Stratton's  note  of  the  8th  discounted.  Face  of  note,  $268.75;  discount, 
$ ;  net  proceeds  placed  to  credit,  $ . 

Deposited  $350. 

Paid  cash  as  follows:  (Checks)  Adams  &  Hackland,  on  account,  $200;  Cavanaugh 
Bros.,  for  bay  horse  to  replace  the  one  sold  this  day,  $125;  M.  S.  Newton  &  Sons,  bills 
of  Nov.  8th  and  Nov.  15th,  less  i<;  Armour  &  Co.,  invoice  of  Nov.  15th,  less  2'/c;  Swift 
&  Co.,  bill  of  Nov.  15th,  less  3^?.  (Currency)  purchases  from  market  wagons,  $62.46; 
freight,  $4.27;  board  of  horses,  $10;  shoeing  horse,  $1.25;  salaries,  Canfield,  $12;  Stuart, 
$12;  Carter,  $15;  HoU,  $15. 

J.  M.  Marsh  drew  cash  for  private  use,  $25.     (Student)  drew  cash  for  private  use,  $25. 

Balance  your  cash  book. 

DIRECTIONS   FOR    POSTING    NOVEMBER. 

First. — Post  your  statement  sheets  to  the  proper  cards  of  the  card  ledger.  From  the 
debit  side  of  the  cash  book  and  from  the  journal  post  such  items  as  belong  on  the  credit 
side  of  the  card  ledger. 

Second. — Post  the  footing  of  the  Amount  of  Invoice  column  of  the  purchase  book  to 
the  debit  side  of  Merchandise  account  in  your  general  ledger,  and  post  each  separate 
invoice,  except  cash  items,  to  the  credit  of  their  respective  accounts  in  the  general  ledger. 

Third. — Post  the  amount  in  the  Monthly  Sales  column  of  the  abstract  sales  book  to 
the  credit  side  of  Merchandise  account  in  your  general  ledger. 

Fourth. — Post  the  Merchandise  Discount  column,  on  the  credit  side  of  the  cash  book, 
to  the  credit  of  Merchandise  Discount  in  the  general  ledger.  Post  each  item  in  this  column 
to  the  debit  of  the  person  or  firm  allowing  the  discount,  as  in  the  July  cash  book. 

Post  cash  entries  as  in  the  month  of  July. 

Fifth. — Post  the  journal  as  in  all  double  entry  sets. 

The  inventory  of  unsold  merchandise  amounts  to  $4595.21.  Horses,  wagon,  and 
harnesses  are  valued  at  $500.  Safe  and  office  fixtures,  valued  at  $112.50.  Unexpired 
insurance,  $32.08. 

Take  a  trial  balance,  and  make  statements  of  losses  and  gains  and  resources  and 
liabilities.     Close  the  general  ledger. 

Com. — 15 


226  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

QUESTIONS. 

1 .  In  what  respect  does  a  single  entry  ledger  differ  from  the  ledger  of  a  business  in 
which  the  books  are  kept  b}-  double  entry? 

2.  How  would  you  keep  a  record  of  cash  transactions,  and  how  would  3-ou  determine 
the  amount  of  bills  receivable  and  the  amount  of  bills  payable  at  any  stated  time? 

3.  How  would  you  keep  a  record  of  your  merchandise? 

4.  Is  it  possible  to  show  as  complete  a  record  of  the  business  by  single  entry  as  by 
double  entry? 

5.  What  does  the  single  entry  journal  contain? 

6.  Describe  the  sales  sheet,  and  explain  its  use  in  the  retail  grocery  business.     Why 
are  sales  sheets  written  in  duplicate  ? 

7.  Describe  the  method  of  making  cash  sales  and  of  recording  the  amounts  of  such 
sales. 

8.  To  what  books  are  the  cash  sales  of  the  day  carried? 

9.  Explain  the  abstract  sales  sheet  and  the  abstract  sales  book. 

10.  Of  what  is  the  purchase  book  an  abstract,  and  what  will  the  footing  of  its  Amount 
of  Invoice  column  show? 

11.  What  will  the  total  footing  of  the  abstract  sales  book  show  at  any  time? 

12.  Where  are  the  items  of  the  sales  sheets  carried,  and  when  should  this  be  done? 

13.  What  should  the  customer's  monthly  statement  contain,  and  what  should  his 
account  in  the  ledger  contain  ? 

14.  What  advantages  has  the  card  ledger  over  the  ordinary  book  form  of  ledger? 

15.  How  should  customers'  statements  be  posted  to  the  card  ledger? 

16.  What  additional  accounts  must  be  opened  in  the  ledger  when  changing  from  single 
entry  to  double  entry? 

17.  How  do  3"ou  obtain  the  necessary  balances  of  the  additional  ledger  accounts? 

18.  From  what  books  do  you  obtain  the  postings  to  your  Merchandise  account  during 
November  ? 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  227 

JOINT   STOCK   COMPANIES  AND   CORPORATIONS. 

The  immense  increase  of  business  during  the  latter  half  of  the  nineteenth  century  has 
made  it  practically  impossible  to  manufacture,  or,  in  fact,  to  conduct  any  of  the  leading 
forms  of  commercial  enterprises  without  a  large  investment  of  capital.  It  is  seldom  that 
an  individual,  or  a  practical  working  partnership,  which  should  contain  only  a  limited 
number  of  members,  is  possessed  of  sufficient  funds,  and  the  corporation  or  joint  stock 
company  is  the  natural  outgrowth  of  these  conditions,  just  as  the  trust,  now  so  prominent 
a  subject  of  discussion,  is  the  natural  outgrowth  of  the  fierce  competition  between  rival 
corporations. 

THE   JOINT   STOCK   COMPANY. 

This  is  in  realit}^  a  partnership  in  which  the  affairs  of  the  business  are  conducted  by 
officers  chosen  by  the  stockholders.  Its  advantage  over  the  ordinar}-  form  of  partnership 
lies  in  the  fact  that  it  enables  a  larger  number  of  investors  to  associate  themselves  in  busi- 
ness than  could  work  effectively  as  ordinary  partners,  and  the  death  of  a  shareholder  or 
the  sale  of  his  interest  in  the  business  does  not  make  a  dissolution  of  partnership  neces- 
sary, since  his  stock,  under  the  act  of  incorporation,  may  be  sold  or  transferred  like  any 
other  personal  propert)-. 

LIABILITY   OF    STOCKHOLDERS. 

The  stockholders  of  a  joint  stock  company  are,  under  the  common  law,  personally 
liable  for  the  debts  of  the  business  conducted,  the  same  as  ordinary  partners;  that  is,  each 
stockholder  is  personally  liable  for  the  entire  debts  of  the  joint  stock  company,  but  in  most 
states  this  liability  may  be  limited  to  the  amount  of  the  stock  subscribed,  provided  the 
joint  stock  company  prints  the  word  "  Limited,"  and  the  amount  of  its  capital  upon  all 
paper  of  the  compan3^  For  instance,  the  heading  "Cleveland  Iron  Works,  Limited, 
Capital  Stock  $50,000,"  would  indicate  that  each  stockholder  of  this  company  is  liable  to 
the  extent  of  his  stock  subscription  only.  Limited  stock  companies  are  much  more  com- 
mon in  England  than  in  the  United  States,  and  must  comply  strictly  with  the  statute  laws 
governing  their  organization  and  conduct. 

THE   CORPORATION. 

Formerly,  corporations  were  organized  by  direct  act  of  the  legislature  of  the  state  in 
which  their  charter  was  granted,  but  the  popularity  of  this  form  of  organization  has  become 
so  great  that  most  states  now  have  a  general  statute  luider  which  corporations  may  be 
formed  without  delaj'  or  difficulty  whenever  the  requisite  number  of  persons  decide  to 
associate  themselves  in  the  carrying  on  of  whatever  business  may  be  selected.  The  ability 
of  many  people  of  limited  capital  to  combine  under  efficient  management,  and  without 
incurring  liability  beyond  the  amount  of  their  stock  subscription,  has  been  one  of  the  chief 
sources  of  the  tremendous  industrial  and  commercial  growth  of  this  co^mtr^^ 

The  incorporated  joint  stock  company,  or  as  it  is  more  commonly  known,  the  corpo- 
ration, has  largely  taken  the  place  of  the  joint  stock  company.  A  corporation  consists  of 
an  association  of  several  persons,  as  provided  for  by  the  statute  laws  of  the  state  in  which 
the  corporation  is  organized.  These  persons  organize  for  the  purpose  of  carrying  on  some 
particular  line  of  business,  as  stated  in  their  charter.  The}-  subscribe  a  certain  amount 
of  money  to  be  used  as  capital  stock,  and  then,  after  the  election  of  the  necessary  ofl&cers, 


.*228  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

proceed  in  the  transaction  of  their  business  precisely  as  a  private  partnership  or  joint  stock 
compan)%  with  the  advantages  that,  in  case  of  the  death  of  any  stockholder,  no  dissolution 
is  necessary,  or  in  case  a  partner  desires  to'dispose  of  his  stock,  he  ma}-  do  so  by  sale,  or 
otherwise,  without  affecting  the  corporation.  The  feature  which  has  made  the  corporation 
so  popular  is  that  each  individual  stockholder  is,  generally  speaking,  liable  only  for  the 
amount  of  his  individual  subscription. 

TRUSTS. 

Trusts  are  combinations  of  corporations,  and  are  organized  by  the  transfer  of  a  majority' 
of  the  stock  of  each  corporation  to  a  central  committee,  or  board  of  trustees,  who  issue  to 
the  stockholders  certificates  showing  that  though  they  have  parted  with  their  stock  they 
are  still  entitled  to  dividends.  Such  combinations  make  it  po.ssible  to  redu'^e  the  cost  of 
manufacturing,  bookkeeping,  selling,  etc.,  and  furthermore,  to  limit  production  in  their 
line  of  business.  The  sharp  competition  of  recent  years,  which  has  often  caused  goods  to 
be  sold  at  less  than  cost,  has  done  much  to  bring  trusts  into  favor  with  the  stockholders 
of  corporations.  Tobacco,  sugar,  steel  wire,  and  numerous  other  commodities,  are  now 
controlled  by  great  trusts  having  enormous  capital;  that  of  the  wire  trust  alone  is  ninety 
million  dollars. 

THE    ORGANIZATION    OF   A   CORPORATION. 

The  statutes  of  the  various  states  specify  how  manj^  stockholders  a  corporation  must 
include.  In  New  York,  at  least  three  persons  of  21  years  of  age  must  unite  to  form  a 
corporation;  in  some  states,  five  or  more  are  required.  These  people  come  together  and 
make  a  certificate  which  contains 

First,  the  name  of  the  corporation,  which  in  some  states  must  begin  with  the  word 
* '  the ' '  and  end  with  the  word  ' '  company. ' ' 

Second,  the  place  where  the  corporation  proposes  to  do  business,  or  locate  its  principal 
office. 

Third,  the  nature  of  the  business  it  proposes  to  carry  on. 

Fourth,  the  amount  of  its  capital,  and  the  number  and  par  value  of  its  shares. 

Fifth,  the  duration  of  the  corporation. 

Sixth,  such  other  information  as  the  statute  may  require. 

This  certificate  is  filed  in  the  office  of  the  secretary  of  state,  and  he  issues  a  license  to 
the  persons  making  such  certificate,  authorizing  them  to  open  books  for  subscription  to 
the  capital  stock  of  the  corporation.  Subscription  books  are  then  opened,  and  the  cai>ital 
stock  of  the  company  is  disposed  of  by  su])Scription,  or  otherwise.  A  certain  amount, 
prescribed  by  the  statute,  must  l)e  subscribed  before  the  corporation  is  permitted  to  do 
business.  After  such  stock  lias  been  sul)scri])ed  for,  and  such  payment  of  the  suliscription 
made  as  is  required  by  the  statute,  a  meeting  of  the  subscribers  is  called,  officers  are 
chosen,  and  Ijy-laws  are  made.  A  record  of  these  proceedings  is  filed  with  the  secretary 
of  state,  and  a  certificate  is  issued  l)y  him  to  tiie  effect  tlial  {\w  corporation  is  fully  organ- 
ized and  authorized  to  do  business  under  the-  laws  of  the  state.  The  organization  of  a 
corporation  recjuires  a  thorough  knowledge  of  the  statutes  of  the  state  under  whicli  it  is 
organized,  and  no  attempt  to  do  l)usiness  sliould  l)e  made  initil  the  statute  reqtiiremcnts 
have  been  fully  met  and  the  cor])oration  organized  under  legal  tlirectit)n.      It  is  always 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  229 

economy  to  secuie  the  services  of  a  lawyer  familiar  with  corporation  affairs  in  effecting 
such  an  organization  and  in  conducting  all  operations  of  the  corporation  that  are  required 
to  compl}'  with  the  laws  of  the  state  in  which  it  is  organized. 

CERTIFICATES   OF    STOCK. 

Certificates  of  stock  are  issued  to  subscribers  as  soon  as  their  subscriptions  are  paid, 
and  these  stock  certificates  are  transferable,  either  wholly  or  in  part,  at  will,  unless  a 
subscriber  be  indebted  to  the  corporation,  in  which  case  they  cannot  be  transferred  with- 
out the  consent  of  a  majoritj^  of  the  stockholders. 

INCREASE   OR    DIMINUTION    OF    CAPITAL   STOCK. 

In  most  states  the  capital  stock  of  a  corporation  may  be  increased  or  diminished  by  a 
vote  of  the  stockholders  holding  a  majority  of  the  stock,  but  all  statutes  set  a  limit  to  the 
amount  of  increase,  and  in  no  case  can  the  stock  be  decreased  to  an  amount  less  than  the 
liabilities  of  the  corporation,  and  such  amount  of  increase  or  decrease  of  capital  stock 
must  be  filed  with  the  secretary  of  state  when  this  increase  or  decrease  is  voted. 

LIABILITY   OF   STOCKHOLDERS. 

In  general,  the  individual  liability  of  a  stockholder  ceases  when  he  has  paid  the  amount 
of  his  stock  subscription,  provided  the  capital  stock  subscribed  has  already  been  paid,  but 
if  any  remains  unpaid,  the  stockholders  who  have  paid  their  subscriptions  are  also  indi- 
vidually hable  for  the  amount  of  the  unpaid  stock;  and  in  some  cases,  notably  national 
banks,  the  subscribers  to  stock  are  liable  for  double  the  amount  of  their  subscriptions. 

LOSSES  AND   GAINS   OF   A   CORPORATION. 

The  losses  and  gains  of  a  corporation  are  found  through  the  Loss  and  Gain  account, 
the  same  as  in  any  other  business,  but  from  this  account  the}^  are  carried  to  a  Surplus 
account,  which  contains  on  its  credit  side  the  gain  of  the  business,  or  on  its  debit  side  the 
loss  of  the  business.  The  Surplus  account  is  allowed  to  remain  open  until  a  dividend  is 
declared,  when  Dividend  is  credited  and  Surplus  debited  for  the  amount  of  the  dividend. 

DIVIDENDS. 

The  division  of  profits  among  the  stockholders  of  a  corporation  is  made  by  means  of  a 

dividend,  which  is  seldom  the  full  amount  of  the  gain,  as  it  is  desirable  to  create  a  surplus 

which  may  be  drawn  upon  as  required.     Corporations  aim  to  declare  regular  dividends  of 

a  fixed  per  cent  at  stated  periods,  so  that  their  stock  may  form  a  desirable  investment  to 

capitalists.     It  is  evident  that  in  dull  and  unprosperous  periods  of  business  there  may  be 

no  profits  to  divide.     It  is  customary,  therefore,  to  leave  in  the  surplus  sufiicient  funds 

to  provide  for  a  dividend,  even  though  there  be  no  profits  in  a  time  of  business  depression. 

Sometimes  the  Loss  and  Gain  account  is  closed  by  declaring  a  dividend  for  a  certain  anicunt  at  the 
time  the  gain  is  ascertained,  placing  this  amount  to  the  debit  of  Loss  and  Gain,  at  the  same  time  debiting 
Loss  and  Gain  with  surphis  for  the  balance  of  gain,  and  transferring  these  amounts  from  the  Loss  and 
Gain  accoimt  to  the  Dividend  and  Surplus  accounts  respective!}-,  but  the  first  method  is  preferable. 

TREASURY   STOCK. 

Sometimes  onl}^  a  part  of  the  capital  stock  is  subscribed  for  before  business  is  com- 
menced, and  the  balance  is  retained  with  a  view  to  selling  it  at  a  later  period,  either  to 


230 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


provide  money  for  running  expenses  or  to  make  extensions  of  business;  this  unsold 
stock  is  known  as  "treasury  stock."  Or,  it  ma}'  be  found  that  the  entire  capital  stock 
has  been  used  for  machinery,  materials,  etc.,  and  in  this  case  sometimes  the  stockholders, 
instead  of  increasing  capital  stock  to  get  money  to  carry  on  the  business,  donate  a  pro 
rata  amount  of  stock  to  the  treasury,  and  this  s£ock  is  sold  to  secure  funds  as  required. 

WATERED   STOCK. 

Watering  stock  consists  in  issuing  shares  without  an}'  equivalent  addition  to  the  cash 
capital  of  the  corporation.  These  shares  are  distributed  among  the  stockholders,  generally 
for  speculative  purposes.  When  this  watered  stock  is  issued  as  a  stock  dividend,  it  is 
generally  done  by  debiting  Loss  and  Gaiji  for  the  amount  of  the  issue. 


THE    BOOKS   OF   A   CORPORATION. 

The  ordinary  books  of  account  for  conducting  a  corporation  business  will  be  precisely 
the  same  as  those  of  a  private  business,  since  the  transactions  will  not  differ,  but  a  number 
of  auxiliary  books  are  required  to  show  the  operations  connected  with  the  corporate  affairs 
of  the  business.  These  comprise  the  minute  book,  subscription  book,  stock  certificate 
book,  transfer  book,  dividend  book,  and  stock  ledger. 

Miuute  Book.  This  book  should  contain  a  record  of  all  the  meetings  of  the  stock- 
holders and  the  board  of  directors,  and  is  generally  kept  by  the  secretary  of  the  corporation. 
No  special  form  of  keeping  this  book  is  required,  as  it  is  simply  a  record  of  the  proceed- 
ings, and  its  form  is  immaterial,  provided  it  contains  an  accurate  report  of  the  proceedings 
of  all  the  meetings. 

Subsc-riptioii  and  Instalment  Book.  This  book  contains  a  list  of  the  subscribers  to 
the  stock  with  the  number  and  the  par  value  of  the  shares  subscribed  for  by  each,  and  it 
paid  for  in  instalments,  a  separate  space  for  each  instalment. 

The  following  form  illustrates  the  instalment  subscription  book. 

Instalment  Subscription  Book. 


Subscribed. 

Paid  Instalments  of  25  Per  Cent.  Bach. 

Date. 

u 

<u      01 

Boa 

3      .£3 

Value 

of 
Shart. 

Signature. 

H 

u 

First  Instalment. 

Second  Instalment. 

Third  Instalment. 

Fourth  Instalment. 

In  what 
Paid. 

1894. 

Date. 

'895- 

Amount. 

Date. 

1896. 

Amount. 

Date. 
1896. 

Amount. 

Date. 

1S96. 

Amount. 

Dec. 

I 

750 

75000 

W.  J.  Hilton. 

I 

Dec. 

I 

18750 

Jan. 

18750 

Feb. 

18750 

Mch. 

18750 

Sundries. 

I 

300 

30000 

E.  M.  Hilton. 

2 

I 

7500 

7500 

•7500 

7500 

It 

I 

250 

25000 

C.  B.  Hilton. 

3 

I 

6250 

6250 

6250 

6250 

44 

I 

200 

20000 

E.  C.  Wardner. 

4 

20 

5000 

5000 

5000 

5000 

Cash. 

6 

•150 

15000 

•J.  A.  Carter. 

5 

ao 

3750 

3750 

3750 

3750 

4t 

10 

50 

5000 

Geo.  Lacy. 

6 

20 

1250 

'1 250 

1250 

1250 

14 

12 

50 

5000 

Thos.  Henderson. 

7 

20 

1250 

1250 

1250 

1250 

<« 

20 

40 

4000 

. 

Jas.  Daniels. 

8 

20 

1000 

1000 

I'OOO 

1000 

4t 

20 

10 

looo 

R.  H.  Merriam. 

9 

20 

250 

250 

250 

250 

it 

MODERN    ILLUSTRATIVE    BOOKKEEPING. 


231 


Sometimes  an  instalment  book  is  kept  separately  from  the  subscription  book,  and  as 
each  instalment  is  paid  the  subscriber  receives  a  script  certificate  for  the  amount  of  his 
instalment,  and  when  all  the  instalments  have  been  paid,  he  exchanges  his  script  certifi- 
cates for  a  stock  certificate,  which  will  show  the  full  amount  of  his  subscription. 

Stock  Certificate  Book.  This  is  a  book  of  blank  certificates  and  stubs,  and  these 
certificates  are  issued  to  the  stockholders  as  soon  as  their  subscriptions  are  fully  paid  and 
the  stubs  are  filled  out,  and  from  them  is  made  up  the  credit  side  of  the  stock  ledger,  in 
which  each  stockholder  receives  credit  for  the  number  of  shares  of  stock  held  by  him. 

On  the  back  of  each  certificate  is  a  blank  bill  of  sale,  by  which  the  stockholder  may 
transfer  his  stock  to  any  other  person. 

The  form  on  page  232  illustrates  the  stock  certificate  book  and  the  manner  of  filling  the 
certificate  and  stub. 

Transfer  Book.  This  is  a  book  of  printed  forms  and  blanks  to  be  filled  in  whenever 
a  stockholder  sells  his  stock,  or  any  part  of  it,  to  another  person,  and  each  certificate 
signed  by  the  seller,  or  his  attorney,  authorizes  the  transfer  of  a  certain  number  of  shares 
of  stock  from  the  account  of  the  seller  to  the  account  of  some  other  person  named  in  the 
certificate.  The  transfer  book  serves  as  a  journal  to  the  stock  ledger,  and  from  it  are 
made  all  entries  to  that  book  after  the  original  stock  issue  of  the  business  has  been  entered 
in  the  stock  ledger.      (See  form  below.) 

Stock    Transfer    3ook. 


NiHubers  ol 

New  Cerllficales 

Issued. 


N  umbers  of 
Certificates 
Cancelled. 


3^ 


7^ 


l1^ 


^o 


^fPC 


> 


■^ 


^^ 


TRANSFERRED   BY 


r^j^^-^47,..^yA 


TO 


C^.^^^^^ 


5or  Palue  Keccineb 


i,_t^do 


hereby  assign  and  transfer  to 


y^^y-TT-K 


y^t-t^.'^^-r^^-^^^t^ 


Shares  of  the  Capital  Stock  <rf 


De  Central  Hational  Bank  of  Pittsburgb,  Pa. 


IDitness^;:222L=^hand     and  seal     ,  this  .4^  day  n^i/^y.'^  ^^.  ^/OO 
Sealed  and  delivered  tn  the  presence  of 


v-^\ 


J?jki\mk7\ 


stock  Ledger.  This  book  is  auxiliarj^  to  the  general  ledger,  and  its  credit  balance 
plus  Treasury  Stock  balance  should  always  agree  with  Capital  Stock  balance  in  the  general 
ledger.  The  stock  ledger  contains  the  name  of  every  person  holding  stock  of  the  company, 
either  by  original  issue  or  by  transfer.  It  is  made  up  originally  from  the  stub  of  the  stock 
certificate  book,  and  as  stock  is  issued  each  holder  is  credited  in  the  stock  ledger  with  the 
par  value  of  his  stock.  When  all  the  stock  is  issued,  it  is  evident  that  the  sum  of  these 
credits  will  equal  the  capital  stock,  as  shown  on  the  credit  side  of  that  account  in  the 
general  ledger. 

After  the  opening  entries,  all  entries  in  the  stock  ledger  should  be  made  from  the  stub 
of  the  transfer  book,  and  as  these  entries  always  consist  of  a  debit  to  a  seller  of  stock 


282 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


238 


whose  name  is  already  in  the  stock  ledger,  and  a  credit  of  an  equal  amount  to  a  buyer 
whose  name  must  be  entered  in  the  stock  ledger  for  a  like  amount,  it  is  evident  that  the 
credit  balance  of  the  stock  ledger  plus  the  treasury  stock  will  always  equal  the  capital 
stock. 

Dividend  Book.  In  this  book,  against  the  name  of  each  person  who  has  an  account 
in  the  stock  ledger,  is  recorded  the  amount  due  him  when  a  dividend  is  declared.  This 
book  may  contain  a  space  for  the  signature  of  each  stockholder  acknowledging  the  receipt 
of  his  dividend,  but  in  large  corporations  these  dividends  are  generally  paid  by  voucher 
checks,  which  are  in  themselves  receipts. 

The  following  forms  illustrate  the  dividend  book  and  the  dividend  check. 

Form  op  Dividend  Book. 


f:^^d^  Semi- Annual  Dividend, 


/. 


,y^^  ^X 


NAME  OF  STOCKHOLDER. 


No.  OF  Amount 

Shares.  of  Dividend, 


WE    HEREBV    ACKNOWLEDGE    RECEIPT 
OF  ACCOMPANYING  DIVIDEND. 


€-<?-Z-<^ 


'^/::jK(^^J^z.d^^-rz^ 


/  (?  o 


Coi 


/■jTCJ  affO 


^^^.^.^^   ^^^  ^Y,^    ^..^^^^^ 


'Ot^c^,  yv. 


■z.--?t^. 


2-^/?     /Z^fff 


'  c  ff      Co  ff 


2-ffe?     /Z^io 


^M\ 


Form  of  Dividend  Check. 


-  V 


(® 


^W^^^^^M^y^^^^ 


,  ^l/>.  2o?  /  . 


OF  /^r     '       a7     \^  y         / 


^^T-TP.'^^ 


^^^^T^^-r^i^^..-^ 


"J^/^/mu 


234  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

OPENING   THE   BOOKS  OF   A   CORPORATION. 

If  the  corporation  is  an  entirel}"  new  business,  it  is  a  simple  matter  to  open  its  books, 
as  shown  in  the  following  propositions. 

Proposition.  James  Brown,  William  Harper,  Charles  Edwards,  Maurice  Chane}-  and 
William  Upton  have  formed  the  American  Motor-Carriage  Company,  with  a  capital  stock 
of  one  hundred  thousand  dollars,  of  which  Brown,  Harper  and  Edwards  have  subscribed 
$30000  each,  and  Chaney  and  Upton  $5000  each.  The  minute  book  would  show  the  pro- 
ceedings of  such  meetings  as  had  been  held,  and  as  soon  as  all  the  stock  is  subscribed  for 
the  following  journal  entry  should  be  made. 

Subscription,  100000.00 

Capital  Stock,  100000.00 

This  journal  entry  should  be  posted  to  the  general  ledger. 

Suppose  these  stock  subscriptions  are  to  be  paid  in  two  instalments,  one  due  Jan.  ist 
and  the  other  due  Feb.  ist.  When  the  first  of  these  instalments  is  paid,  it  is  evident  that 
the  cash  book  of  the  corporation  should  contain  a  debit  entry  of  $50,000,  and  that  Siib- 
scriptio7i  should  be  credited  for  this  amount,  since  it  was  from  subscription  that  the  cash 
was  received. 

Entry. 

CASH,    DR. 

190-. 

Jan.    I     Subscription,  instalment  No.  i,  50000.00 

And  this  amount  being  posted  to  the  general  ledger  will  cancel  half  the  Subscription 
account.  If  the  company  commences  business  without  collecting  the  balance  of  the  capital 
Stock,  its  books  for  purchase  of  material,  sale  of  goods,  payment  of  expenses,  etc.,  will  be 
precisely  the  same  as  if  it  were  an  ordinary  partnership. 

When  the  second  instalment  is  paid,  there  will  be  another  entry  of 

CASH,    DR. 
190-. 

Feb.    I     Subscription,  instalment  No.  2,  50000.00 

And  this  being  posted  to  the  general  ledger  will  balance  the  Subscription  account,  showing 
that  it  is  all  paid  in.  The  stock  will  now  be  issued,  and  from  the  stub  of  the  stock  cer- 
tificate book  will  be  posted  to  the  stock  ledger  $30000  each  to  the  credit  of  Brown,  Harper 
and  Edwards,  and  $5000  each  to  the  credit  of  Chaney  and  Upton — $100000  in  all — which 
agrees  with  the  amount  of  the  capital  stock  in  the  general  ledger.  The  books  are  now 
opened,  and  the  business  may  proceed. 

Proposition.  Jan.  i,  190-.  The  Silver  Lake  Ice  Company  has  been  incorporated  with 
a  cash  capital  of  $37500,  distributed  as  follows:  Edward  F.  Martin,  100  shares;  Geo. 
Martin,  100  shares;  Fred  Martin,  50  shares;  Geo.  Allen,  5  shares;  Wm.  Ryan,  50  shares; 
David  Ryan,  70  shares,  at  a  par  value  of  $100  each.  The  stock  is  paid  for  in  four  equal 
assessments  of  250$  each,  dated  Jan.  ist,  Feb.  ist,  July  ist  and  July  20th.  Make  a  journal 
entry  to  open  the  books  and  the  four  cash  book  entries  required,  sujiposing  all  instalments 
are  paid  when  due.  What  names  and  amounts  would  ajipear  in  >our  stock  ledger  when 
the  stock  is  issued  ? 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  235 

TO   CLOSE   THE   BOOKS   OF   A  BUSINESS  ALREADY    IN    OPERATION,   AND    REOPEN   AS  A 

STOCK   COMPANY. 

Proposition.  The  firm  of  Warren  &  Carson  have  been  engaged  in  the  manufacture  of 
furniture,  and  they  propose  to  continue  business  as  The  Warren  &  Carson  Manufacturing 
Company,  with  a  capital  stock  of  $100000,  the  stock  to  be  divided  as  follows:  W.  A. 
Warren  to  receive  500  shares  and  E.  B.  Carson  250  shares.  C.  M.  Harris  has  subscribed 
for  50  shares;  D.  J.  Jones,  50  shares;  D.  E.  lycavitt,  50  shares;  and  100  shares  are  kept 
as  treasury  stock,  to  be  disposed  of  for  the  benefit  of  the  business  when  so  voted  by  the 
directors.     The  resources  and  liabilities  of  the  firm  of  Warren  &  Carson  as  as  follows: 

RESOURCES. 
Real  Estate,  $20000. 

Cash,  7500. 

Merchandise,  49800. 

Unfinished  Goods,  24200. 

Raw  Material,  '  38700. 

Bills  Receivable,  22690.50 

Accounts  Receivable,  41987.50 


Total, 

$204878.00 

LIABILITIES. 

Mortgage  on  real  estate, 

$15000.00 

Bills  Payable, 

46965.50 

Accounts  Payable, 

72912.50 

$134878.00 

Warren's  net  worth. 

46664.75 

Carson's  net  worth. 

23335-25 

Total,  $204878.00 

If  it  is  desired  to  open  a  new  set  of  books,  as  is  generally  the  case  when  a  corporation 

is  formed,  it  is  necessary  first  to  close  the  old  books,  which  should  be  done  by  making  a 

journal  entry  as  follows: 

Warren  &  Carson  Fiu-niture  Co.,  204878.00 

Real  Estate  20000.00 

Cash,  7500.00 

Merchandise,  49800.00 

Unfinished  Goods,  24200.00 

Raw  Material,  38700.00 

Bills  Receivable,  22690.50 

Accounts  Receivable,  41987.50 

Posting  this  entry  will  balance  all  resource  accounts.     Then  should  follow  the  journal 

entry  of 

Mortgages  Payable,  15000.00 

Bills  Payable,  46965.50 

Accounts  Payable,  72912.50 

W.  A.  Warren,  46664.75 

E.  B.  Carson,  23335.25 

The  Warren  &  Carson  Furniture  Co.,  204878.00 


236  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

Posting  this  entry  will  close  all  liability  accounts,  the  partners'  accounts,  and  also  balance 
The  Warren  &  Carson  Furniture  Co.  account,  and  close  the  books  of  the  old  business. 

To  open  corporation  books,  as  in  the  case  of  a  new  corporation,  the  capital  stock, 
$100000,  must  appear  on  the  credit  side  of  the  general  ledger.  The  amount  of  the 
resources  of  the  old  business  must  appear  as  debit  balances,  and  the  habilities  as  credit 
balances.  The  names  of  Warren  and  Carson  must  not  appear  in  the  general  ledger  of 
the  corporation,  as  their  worth  at  closing  has  been  absorbed  by  the  capital  stock.  Make 
the  following  journal  entry. 

Subscription,  15000.00 

Treasury  Stock,  10000.00 

Real  Estate,  20000.00 

Cash,  7500.00 

Unfinished  Goods,  24200.00 

Merchandise,                                .  49800.00 

Raw  Material,  38700.00 

Bills  Receivable,                      •  22690.50 

Accounts  Receivable,  41987.50 

Good  Will,  5000.00 

Mortgages  Payable,  15000.00 

Bills  Payable,  46965.50 

Accounts  Payable,  72912.50 

Capital  Stock,  100000.00 

Referring  to  the  statement  of  resources  and  liabilities  of  Warren  &  Carson,  it  will  be 
seen  that  the  actual  difference  between  the  resources  and  liabilities  of  that  firm  is  $70000. 
For  this  amount  W.  A.  Warren  has  received  $50000  worth  of  the  capital  stock  in  the  new 
corporation,  and  E.  B.  Carson  has  received  $25000  worth,  a  total  of  $75000,  or  $5000  more 
than  the  actual  difference  between  the  resources  and  liabilities  of  their  firm.  It  maj'  be 
very  justly  assumed  that  the  good  will  of  the  old  business  was  worth  this  amount,  and 
thus  Good  Will  should  be  debited  for  $5000  of  the  stock,  or  the  word  ' '  franchise ' '  may 
be  used,  if  preferred.  The  remaining  $25000  of  the  $100000  capital  stock  is  balanced  by 
the  debit  of  Subscription,  $15000,  and  Treasury  Stock,  $10000.  Post  this  journal  entry 
to  the  main  ledger  of  the  new  books,  and  the  books  of  the  corporation  are  correctly  opened. 

When  this  entry  has  been  made,  Warren  should  receive  $50000  worth  of  stock  certifi- 
cates and  Carson  $25000  worth  of  stock  certificates,  since  their  worth  in  the  individual 
partnership  business  has  been  absorbed  in  the  capital  stock  of  the  corporation. 

When  the  subscriptions  of  the  new  stockholders,  Harris,  Jones  and  Lcavitt,  are  paid, 
an  entry  of  Cash,  Dr.,  $15000,  and  Subscription,  Cr.,  $15000,  will  be  made,  and  stock 
issued  to  Harris,  Jones  and  lycavitt  to  the  amount  of  $5000  each,  making  a  total  of  $90000 
on  the  credit  side  of  the  stock  ledger.  This  leaves  a  difference  of  $10000  between  the  stock 
ledger  credits  and  the  credit  of  Capital  Stock  in  the  main  ledger.  But  there  is  treasury 
stock  yet  to  be  sold,  amounting  to  $10000,  and  whenever  this  is  sold,  Cash  will  be  debited 
and  Treasziry  Stock  credited,  thus  canceling  the  Treasury  Stock  account,  while  capital 
stock  will  be  issued  to  the  purchasers,  and  the  amounts  entered  in  the  stock  ledger,  thus 
completing  the  $100000  necessary  to  make  it  agree  with  the  Capital  Stock  account  in  the 
inain  ledger. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  287 

TO   CONTINUE  THE   BOOKS   OF   A   PRIVATE   OR   ORDINARY    PARTNERSHIP   BUSINESS  AS  THE 

BOOKS   OF   A   CORPORATION. 

In  tke  proposition  just  advanced  and  explained,  let  us  suppose  that  the  corporation 
does  not  care  to  go  to  the  expense  of  purchasing  new  books,  but  desires  to  make  such 
entries  as  will  continue  the  books  of  the  private  partnership  as  corporation  books.  Exam- 
ining the  journal  entry  on  page  236,  it  will  be  seen  that  the  accounts  showing  the  resources 
and  liabilities  of  the  private  business  are  not  changed  after  they  have  been  closed  in  the 
books  of  the  partnership  and  transferred  to  the  books  of  the  corporation;  therefore,  no 
entries  of  these  accounts  are  necessary,  as  they  will  have  the  same  balances,  whether  the 
business  be  a  partnership  or  a  corporation. 

To  change  the  books  from  a  partnership  to  a  corporation,  make  the  following  entry  in 
the  journal. 

W,  A.  Warren,         .  46664.75 

E.  B.  Carson,  23335.25 

Subscription,  15000. 

Treasury  Stock,  loooo. 

Good  Will,  5000. 

Capital  Stock,  100000.00 

Post  this  entry  to  the  main  ledger,  and  j-ou  have  the  books  correctly  opened. 

The  stock  ledger,  of  course,  will  be  opened  exactly  as  in  the  first  jDroposition,  since  the 
conditions  are  not  changed.  The  capital  stock  is  made  up  of  the  surplus  of  resources 
over  liabilities  (which  is  shown  by  the  net  worth  of  W.  A.  Warren  and  E.  B.  Carson, 
$70000);  of  subscription,  $15000;  of  treasury  stock,  $10000;  and  of  the  good  will,  or 
franchise,  estimated  to  be  worth  $5000.  The  above  journal  entry  will  balance  the  per- 
sonal accounts  of  Warren  &  Carson,  and  also  show  the  amount  of  subscription  due,  the 
treasury  stock  on  hand,  and  the  value  of  the  good  will,  or  franchise,  while  Warren  & 
Carson  will  receive  credit  on  the  stock  ledger  for  $75000  worth  of  capital  stock,  leaving 
the  remaining  $25000  to  be  credited  to  the  proper  persons  when  the  subscription  is  paid 
and  the  treasury  stock  disj^osed  of. 

A  VOUCHER   SYSTEM    OF   ACCOUNTS. 

Within  the  past  few  years  there  has  been  a  great  advance  in  the  systematizing  of 
accounts,  and  in  the  proper  distribution  of  the  various  items  of  expenditure.  This  system- 
atic accounting  originated  in  the  books  of  railroad  companies,  and  the  interstate  commerce 
act,  requiring  a  uniform  system  of  bookkeeping  by  all  the  railroad  companies  of  the  United 
States,  has  done  much  to  secure  a  uniform  and  scientific  system  of  accounts  among  these 
great  corporations;  and  it  is  perhaps  in  the  books  of  railroad  companies  and  other  large 
corporations,  which  can  afford  to  pay  accountants  of  high  ability,  that  the  voucher  system 
of  accounts  is  seen  in  its  highest  stage  of  development.  It  is,  however,  easily  adaptable 
to  any  business,  and  possesses  many  advantages,  which  will  readily  be  seen  when  it  is 
applied. 

The  work  for  the  student  in  the  month  of  December  will  shov\  the  voucher  system  of 
accounts  as  applied  to  the  books  ot  a  corporation  engaged  in  the  manufacture  of  high 
grade  shoes. 


238 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


It  is  not  claimed  that  the  transactions  afford  a  completely  scientific  exposition  of  shoe 
manufacturing  accounts,  the  object  being  rather  to  show  the  voucher  system,  but  in  the 
collection  of  data  the  books  of  some  of  the  largest  shoe  and  leather  houses  in  Rochester, 
N.  Y.,  and  Lynn,  Brockton,  and  Boston,  Mass.,  have  been  freely  consulted. 

The  following  form  illustrates  the  voucher  to  be  attached  to  a  bill  of  leather  received 
from  Cutler  &  Porter,  of  Springfield,  Mass.,  purchased  on  4  months'  time  with  5'c  dis- 
cou.nt  for  cash. 


VOUCHER  IMO. 


2654 


Jq   Cutler  &  Porter   j^^ 
Springfield,  Mass. 


.  .  THE 


W.  J.  Hilton  Shoe  Co. 


A\anufacturers  of 


Terms 


Net  4ra.  ,  5:^'  cash 


BOOTS  AND   SHOES. 


ACCOUNT. 

DATE. 

Materials 

Nov. 

3 

Materials  as  per  invoice 

1896 
94 

75 
84 

1801 

5fo 

91 

i 
1 

1 
1 

Extension  and  distribution  cert 

Prices 

Receipt  of  Goods 

ified  by 

Bookkeeper. 

Approved  h 

y 

Buyer. 

It,           a 

^^ ^  c^cy  / 

Rec.  Clerk. 

Manager. 

Received 190       of  The  W.  J.  HILTON  SHOE  CO., 

Eighteen  hundred   one   and   91-100    ---------      dollars 

in  full  settlement  of  account  as  above. 
^      1801.91 


PLEASE     DATE,    SIGN,    AND     RETURN     PROMPTLY. 

The  voucher  should  be  pinned,  or  pasted,  to  the  original  bill  alter  il  has  hccu  certified 
by  the  bookkeeper,  the  buyer,  and  the  receiving  clerk,  or  ac  least  b}'^  the  bookkeeper,  and 
then  invoice  and  voucher  together  should  be  presented  to  the  president  or  the  manager  for  his 
approval,  after  which  an  abstract  of  the  voucher  should  be  entered  in  the  voucher  register 
(see  pages  246  and  247),  which  will  show  in  the  When  Due  colinnn  the  date  upon  which 
each  bill  should  be  paid.  When  due,  01  a  day  or  two  earlier,  the  vouchers  should  be 
detached  from  tlie  invoices,  and  the  bookkeeper  should  calculate  the  discount,  if  any,  to 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


283 


which  each  invoice  is  entitled,  and  deduct  it  on  the  voucher,  so  that  the  net  amount  due 
will  appear  in  its  second  money  column,  after  which  the  voucher  should  be  presented  to 
the  treasurer,  who  should  make  out  a  check  for  the  amount  due,  and  the  check  should  be 
enclosed  wdth  the  voucher  and  sent  to  the  person  of  whom  the  invoice  was  purchased. 
The  voucher  is  an  abstract  of  the  original  bill,  and  on  the  back,  under  "  Charged  To/'  is 
shown  the  business  account,  or  accounts,  to  which  it  is  charged.     (See  model  below.) 


I 


CD 
CV2 


O 
CD 

CD 
O 

CO 


■■  3 
:  O 


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OJ 

x: 
u 

3 
O 
> 


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CD 
00 


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rv    V,     -t-i      ^H 


.2  tij  +-" 

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tfi 


tri  :=:    y    rt    h  ^ 


ci  :;:    cj 


cu 


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to 

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O 


The  following  form  illustrates  a  voucher  check,  and  it  will  be  noted  that  even  if  the 
voucher  is  not  returned,  as  requested,  the  check  itself  is  a  full  receipt  for  the  payment  of 
said  voucher. 

Form  of  Voucher  Check. 


No... 


2  ^.^^ 


rir-^.^j.^^ 


(Yoiir  place  here.) 


^cff'V/ns^'t^ai 


ma/miy 


•A> 


9'' 


--;^^Z---2Z-'2>«>;?-5S-2 


^?-z-,2-<?-z-<^<i'V>  i:x^-zi^>C-#^,.<2-<2^ 


#^^~ 


In  case  a  number  of  bills  have  been  purchased  from  one  house,  and  it  is  desired  to 
send  the  pajnnent  all  at  one  time,  the  bookkeeper  should  not  attach  vouchers  to  invoiced 
when  received,  but  should  have  the  invoices  verified  and  file  them  without  the  vouchers. 
When  it  is  desired  to  pay  these  invoices,  prepare  a  single  voucher  to  cover  the  entire 
number  of  invoices  paid;  for  examj^le,  invoices  received  of  Gould  &  Lincoln,  Boston,  as 
follows:  Nov.  ist,  net,  $275.85;  Nov.  20,  2«  10  ds.,  $345.85;  Nov.  30,  2'"^  10  ds.,  $400. 
It  is  desired  to  pay  these  bills  Dec.  5th.     The  following  voucher  would  be  prepared. 


240 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


VOUCHER    NO 

Yq       Gould  &   Lincoln        j-^j. 

Bos  ton 

Terms : 


Form   of  Voucher. 
2678 


.  THE 


W.J.  Hilton  Shoe  Co. 

Manufacturers  of 

BOOTS   AND    SHOES. 


ACCOUNT. 

DATE. 

Materials 

Oct. 

1 

Net 

345 

400 

85 

275 

85 

Mchy. 

20 

2-10 

ds. 

i  i 

30 

2-  10 

ds. 

2,"^   discount 

74  5 
14 

85 
92 

730 
J1006 

93 
78 

Extension  and  distribution  certi 
Prices                                           ' 

fied  by 

Bookkeeper. 

Approved  by 

Jy^ 

i            a 

Buyer. 
Rec.  Clbrk. 

■^::>\^^^^>^     ^ 

Receipt  of  Goods 

t 

Manager. 

Received  190 

Ten   hundred    six   and    78-100    - 

in  full  settlement  of  account  as  above. 
,t      1006.  78 


,  of  The  W.  J.  HILTON  SHOE  CO., 
'..."...".."...."  ...~....I....~.-~....Z....~.  Dollars, 


PLEASE     DATE,    SIGN,     AND     RETURN     PROMPTLY. 


Z 

< 

.  o 


00 

co 

C\2 


o 


3 
O 


O 
CD 

CD 

O 

CO 


o 
o 
c 

•1-1 

I — I 
P 

o 


o 


CN2 
O 


<«■ 


CD 


o 


C\2 
C\2 

6 
2 

o 
<U 

u 


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o 


> 

o 


C3 


LO             LO 

1 

00          00 

LO             LO 

t-      -^J- 

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. 

. 

. 

h- 

, 

, 

. 

Q 

<f. 

V-. 

LLl 

C3 

< 

X 

o 

ies,    .    .    . 
and  Tool 

o" 

- 

c£, 

t  and  Oil 
Expenses 

Patterns, 
[jlies,     .    . 

r; 

ill  Suppl 
acliinery 

X 

w 

-.-1 

3 

0 

n 

tr. 

•-• 

OJ 

"  a 

n 

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8  8^ 

uel,  Ligli 
raveling 
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asts  and 
ffice  Sup 

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Pi 

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Plh  J^  W  .4  O               1 

MODERN    ILLUSTRATIVE    BOOKKEEPING.  241 

Freight  bills  and  other  accounts  of  like  nature  would  generally  be  paid  in  this  manner, 
although  some  bookkeepers  would  prepare  a  separate  voucher  for  each  invoice.  This, 
however,  is  requiring  an  unnecessary  amount  of  work.  Many  business  houses  pay  all 
invoices  received  from  the  first  to  the  loth  on  the  loth,  all  invoices  received  from  the  loth 
to  the  2oth  on  the  20th,  all  invoices  received  from  the  20th  to  the  30th  on  the  first  of  each 
month,  and  regard  these  as  cash  payments;  and  their  customers,  if  notified  of  this  method 
of  payment,  generally  do  not  object  to  receiving  such  payments  and  allowing  cash  dis- 
counts. Many  business  houses  have  a  check  prepared  as  a  part  of  the  voucher,  and  the 
voucher  and  check  are  sent  as  one  to  the  creditor,  thus  ensuring  the  return  of  the  voucher, 
as  it  must  pass  through  the  bank  with  the  check,  which  is  not  detachable. 

A'ouelier  Keg'ister.  This  is  the  distinctive  book  of  the  voucher  system  of  accounts, 
and  by  its  use  it  is  possible  to  dispense  entirely  with  accounts  payable,  since  the  total 
amount  of  Vouchers  Payable  Credit  column,  as  shown  in  the  register,  will  show  the  total 
credits  which  would  be  carried  to  accounts  paj^able  in  the  ordinary  form  of  bookkeeping, 
while  the  total  amount  of  \^ouchers  Payable  Debit  column  will  show  the  debits  that  would 
be  carried  to  accounts  payable.  Of  course  the  difference  between  the  footings  of  Vouchers 
Payable  Credit  and  Vouchers  Payable  Debit  columns  should  show  at  any  time  the  amount 
of  vouchers  unpaid,  which  will  be  the  accounts  payable  of  the  business,  and  these  can  readily 
be  proved  b)-  comparing  with  the  actual  vouchers  on  file. 

As  soon  as  a  bill  has  been  examined,  a  voucher  should  be  made  out  and  certified  by 
the  proper  parties,  after  which  the  distribution  of  the  items  to  the  proper  accounts  should 
be  made  on  the  back  of  the  voucher;  and  from  this  distribution  should  be  made  the  entries 
in  the  voucher  register,  where  as  many  columns  may  be  provided  as  the  business  may 
require,  and  these  columns  may  be  classified  so  as  to  show  whether  the  items  of  cost  were 
incurred  in  the  first  cost,  manufacturing  expenses,  selling  expenses,  or  such  other  divis- 
ions of  the  business  as  may  be  found  advisable. 

The  advantages  of  such  divisions  of  the  expenses  of  a  business  cannot  be  overesti- 
mated, as  it  will  be  seen  by  a  little  study  of  the  register  that  b}^  the  use  of  the  footings 
of  the  various  columns  and  the  output  or  product  of  the  business;  that  is,  the  number  of 
shoes  manufactured  in  a  given  period,  an  approximate  cost  of  almost  any  department  of 
the  work  may  be  obtained.  For  instance,  suppose  there  were  on  hand  at  beginning  $10000 
worth  of  leather,  and  at  closing  there  is  on  hand  $8000  worth,  then  $10000  minus  $8000, 
or  $2000,  plus  the  footing  of  the  I^eather  column  in  the  voucher  register,  divided  by  the 
number  of  shoes  made  in  December,  will  give  the  average  cost  per  shoe  for  leather  during 
that  month.  The  same  ma)'  be  applied  to  the  expense  of  selling,  of  manufacturing,  etc. 
These  divisions  of  expense  will  corres^Dond  with  the  divisions  of  the  Loss  and  Gain  account, 
as  shown  in  the  statement  of  losses  and  gains  at  the  end  of  the  year. 

When  a  voucher  is  paid,  the  asual  entry  is  made  on  tne  credit  side  of  the  cash  book, 
with  the  exception  that  in  the  left-hand  explanation  space  snould  be  written  Voiic/ier, 
with  its  number,  inscead  of  the  name  of  the  account  payable  settled  i^see  form  of  cash 
book,  pages  246  and  247). 


Com.  — 16 


242 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


SHOE    MANUFACTURING    BUSINESS. 

TheW.  J.  Hilton  Shoe  Company  was  organized  as  a  stock  company  Jan.  i,  1895.  ^^s 
capital  stock  of  $200000  is  held  as  follows:  W.  J.  Hilton,  $85000;  E.  M.  Hilton,  $40000; 
E.  C.  Wardner,  $35000;  Geo.  Lacy,  $10000;  James  Daniels,  $9000;  R.  H.  Merriam,  $1000; 
and  $20000  of  stock  remains  in  the  treasur}-. 

The  president  of  the  corporation  is  W.  J.  Hilton;  vice-president,  E.  C.  Wardner;  sec- 
retary, R.  H.  ^Merriam;  treasurer.  E.  M.  Hilton;  general  manager,  Geo.  Lacy. 

The  members  of  the  board  of  directors  are  W.  J.  Hilton,  E.  M.  Hilton,  James  Daniels, 
R.  H.  Merriam,  and  Geo.  L,acy. 

The  salary  of  the  president  is  $2000;  of  the  treasurer,  $1000;  of  the  secretary,  $1000; 
of  the  general  manager,  $3000.  R.  H.  Merriam,  the  secretary,  is  also  the  auditor  of  the 
books.     (Student)  will  act  as  head  bookkeeper. 

WORK    FOR  THE    STUDENT. 

The  trial  balance  taken  Nov.  30,  190-,  shows  the  following  balances  in  the  general 
ledger.  You  may  enter  these  balances,  except  Cash,  in  3'our  general  ledger.  Allow  one- 
third  page  to  each  account,  except  Merchandise  Sales,  which  should  have  one-half  page 
space.  Make  the  date  of  entry  Dec.  i,  190-,  and  write  Balance  in  the  explanation  space. 
Enter  the  cash  balance,  $17582.78,  in  your  cash  book  on  the  debit  side. 


Trial  Balance,  November  30,  19c- 


Capital  Stock, 
Treasury  Stock, 
Good  Will, 
Surplus, 

Reserve  for  Bad  Debts, 
Undivided  Profits, 
Interest  &  Discount, 
Taxes, 

Discount  on  Purchase*i, 
Discount  on  Sales, 
Merchandise  Sales, 
Merchandise  Returned, 
Bills  Receivable, 
Accounts  Receivable. 
Vouchers  Pavable. 
Bills  Payable, 
Real  Estate, 
Collection  &  Exchange, 
Machinery  &  Tools, 
Furniture  &  Fixtures, 
Cash  (ill  bank  ), 
Materials, 


20000.00 
30000.00 


126.17 

823.37 

8853.89 

2685.40 

4895.00 

44.008.00 


73742.50 

448. 2(- 

60280.10 

3580.40 

I75S2.78 

224375.60 


200000. CO 

20860.00 
1470.00 

1425.10 
6831.26 

422189.85 


,"^0620.00 

I  3500. CO 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  ?43 

I^abor,  139993-75 
Freight,  3835 -60 

Foremen's  Salaries,  4580.CX) 

Lasts  &  Patterns,  12589.60 

Mill  Supplies,  •    4940.00 
Fuel,  Light  &  Oil,  3547- 5° 

Royalties,  6371.20 

Salesmen's  Salaries,  10468.70 

Salesmen's  Expenses,  6521.60 

Office  Help,  3543-38 

Officers'  Salaries,  6416.67 

Expense,  1385.40 

Repairs,  1125.00 

Office  Supplies,  185.40 


696905.21      696905.21 


The  accounts  receivable  are  as  follows: 

Hub  Shoe  Co.,  Boston,  Nov.  25th,  net  30,  2/10,  2786.45 

Dodge  &  Rice,  Boston,  Aug.  4th,  4  mos.,  4210.00 

Pond  &  Eaton,  Boston,  Nov.  3d,  net  30,  1782.45 

Providence  Boot  &  Shoe  Co.,  Providence,  R.  I.,  Oct.  5th,  net  60,  1242.50 

E.  F.  Woods  &  Co.,  Providence,  R.  I.,  Nov.  24th,  net  30,  2    10,  1446.00 

Sam  Stone  &  Co.,  Danbury,  Conn.,  Nov.  20th,  net  30,  2    10,  798.50 

Geo.  H.  Deane  &  Co.,  Hartford,  Conn.,  Nov.  28th,  net  30,  2/10,  1342.75 

New  Haven  Trading  Co.,  New  Haven,  Conn.,  Nov.  27th,  5-  10,  2836.70 

E.  M.  Lyons  &  Co.,  New  Haven,  Conn.,  Oct.  30th,  net  30,  628.50 

Bay  State  Shoe  Co.,  Worcester,  Mass.,  Nov.  25th,  3   15,                               *  3245.50 

Marsh,  Fielding  Co.,  Chicago,  Nov.  loth,  2/30,  4697.50 

Quaker  Shoe  Co. ,  Philadelphia,  Nov.  15th,  3 '30,  6255.75 

Hamilton,  Brown  Shoe  Co.,  St.  Louis,  Mo.,  Oct.  5th,  sight  draft  60  ds.,  4875.20 

Pittsburg  Furnishing  Co.,  Pittsburg,  Pa.,  Nov.  20th,  2    15,  4219.70 

Rich,  Lantz  &  Harris,  Cleveland,  O.,  Oct.  3d,  90  ds.  net,  3640.50 

In  5'our  customers'  ledger  open  accounts  with  each  of  the  above  firms,  allowing  one- 
fourth  page  to  each  name,  and  enter  on  the  debit  side  the  date,  terms,  and  amount  due 
from  each  firm.  See  that  the  total  of  these  debit  footings  equals  the  amount  of  Accounte 
Receivable,  as  shown  in  your  general  ledger. 

In  your  envelope  entitled  ' '  Vouchers  Payable ' '  3'ou  will  find  invoices  from  other 
persons,  which  make  up  vouchers  payable,  as  shown  on  the  credit  side  of  that  account  in 
your  general  ledger.  Retaove  these  invoices  from  your  envelope,  and  prepare  a  voucher 
for  each  invoice  according  to  models  on  pages  238  and  239. 

No.  2780. — J.  Russell  &  Co.  On  the  back  of  the  voucher  charge  $247.75  to  ^Machin- 
ery  &  Tools;  the  balance  of  the  bill  to  Mill  Supplies.  Attach  the  voucher  to  the  invoice, 
and  place  both  in  Vouchers  Payable  envelope. 

No.  2781. — On  the  back  of  this  voucher  charge  the  full  amount  of  the  bill  to  Materials. 

No.  2782. — Charge  $462  of  this  bill  to  Real  Estate  and  $25  to  Repairs,  writing  Repairs 
on  one  of  the  blank  lines  at  the  bottom  of  the  voucher. 


244 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Ko.  2783. — Charge  the  full  amount  to  Materials. 

No.  278-4. — Enter  the  full  amount  under  Machinery  &  Tools. 

Xos.  2785,  2780. — Enter  the  full  amount  of  each  invoice  wider  Materials. 

No.  2787. — Charge  to  Machinery  &  Tools. 

No.  2788. — Charge  to  Materials. 

Xo.  2780. — Charge  to  Furniture  &  Fixtures. 

Enter  the  above  vouchers  in  your  voucher  register,  as  shown  in  model,  pages  246  and 
247,  carrjang  each  amount  to  the  proper  column,  as  shown  in  the  distribution  on  the  backs 
of  the  vouchers,  and  the  totals  to  \^ouchers  Payable  Cr.  column.  Those  accounts  which 
have  no  special  columns  should  be  entered  under  Miscellaneous  Accounts.  See  that  the 
footing  of  Vouchers  Payable  Cr.  column  in  your  voucher  register  agrees  with  the  credit 
of  Vouchers  Payable  in  your  general  ledger. 

Foot  and  rule  Vouchers  Payable  Cr.  column,  and  also  each  column  of  distribution  and 
the  Miscellaneous  Accounts  column,  and  see  that  the  total  of  these  columns  equals  the 
footing  of  Vouchers  Payable  Cr.  column.  These  amounts  have  already  been  posted,  and 
should  not  be  included  in  the  December  posting. 

In  your  stock  ledger  open  accounts  as  follows:  W.  J.  Hilton,  credit,  850  shares, 
$85000;  E.  M.  Hilton,  credit,  400  shares,  $40000;  E.  C.  Wardner,  credit,  350  shares, 
$35000;  Geo.  Lacy,  credit,  100  shares,  $10000;  James  Daniels,  credit,  90  shares,  $9000; 
R.  H.  Merriam,  credit,  10  shares,  $1000.  Write  the  number  of  shares  to  the  credit  of 
each  person  in  the  explanation  space  of  the  stock  ledger. 

The  stock  certificates  would,  of  course,  be  already  issued,  but  in  order  to  show  how 
this  would  be  done,  you  may  fill  out  certificates  for  the  proper  amount  of  stock  to  each 
person  in  your  stock  certificate  book,  dating  the  certificates  Jan.  i,  1895.  Hand  these 
certificates  to-  your  teacher  for  approval,  after  which  place  them  in  Vouchers  for  Others. 

Books  Kept.  The  books  to  be  kept  in  this  business  are  the  journal-daybook,  cash 
book,  sales  book,  voucher  register  and  bill  book. 

Journal-daybook.  The  following  form  illustrates  the  journal-daybook.  It  does  net 
differ  materially  from  that  of  August  and  September. 


November  29,   190-. 


General. 

Bills  Rec. 

I..F. 

Accts.  Rec. 

General. 

i 

1260 

26 
26 

855 
2432 

82«7 

14 

12 
S6 

B.  Receivable                                 Note  at  90  ds. ,  with  int. 
Interest                                 added,  to  pay  invoice, 
Sam  Stone  &  Co.                 10  20. 

(1 

Reserve  for  Bad  Debts                 To  bal.  personal  "<  and 
B.  Rec.                                  note  of  Iv.  &  Co. 
Eastman  &  Co. 

B.  Receivable                                 Note  at  60  ds.  to  1)al.  <'jr 
Parker  Bros.                         to  Nov.  i. 

Bills  Receivable,                                                                Dr. 
Accts  Receival)le,                                                          Cr. 

S42 

840 

1 

2432 

50 

12 
68 

12 
420 

4II4 

64 

3287 

4114 

62 

4547 

4547 

26 

1 

MODERN    ILLUSTRATIVE    BOOKKEEPING. 


245 


Cash  Book.  The  cash  book  is  iUustrated  on  pages  246  and  247,  and  does  not  differ 
materially  from  that  of  August  and  September. 

Sales  Book.  The  sales  book  contains  one  special  column  for  cash  sales;  otherwise 
it  is  similar  to  the  ordinary  sales  book  of  May.  The  following  form  illustrates  the  sales 
book. 

November  i,   190-. 


I,.F. 


67 


Ward  &  Hiland,  Boston, 

10  cases,  J91,     360  prs. 
ID      "       J76,     360    " 


Priest  Bros.,  City, 

12  prs.,  i+91 
12     "      576 


Net  60,  3/ 10 
3.00 
2.50 


Cash 
3.00 
2.50 


Cash. 


36 

30 


Items. 


loSo 
900 


Total  oil 
Acct. 


I9S0 


Voucher  Register.     The  voucher  register  is  illustrated  on  pages  246  and  247. 
Bill  Book.     The  bill  book  does  not  differ  from  that  previously  used. 


VOUCHERS. 

Xo.  A. — In  an  envelope  marked  ' '  Cash  Drawer  "  you  will  find  tht  following  notes  and 
drafts,  which  constitute  tlie  Bills  Receivable  balance  of  the  main  ledger.  Take  these 
notes  and  drafts  from  your  envelope,  and  enter  them  on  the  bills  receivable  side  of  your 
bill  book. 

Xo.  233. — Date,  Sept.  loth;  time,  90  days;  amount,  $895;  maker,  Providence  Boot 
&  Shoe  Compan}-,  Providence,  R.  I. 

K'o.  234. — Date,  Sept.  15th;  time,  4  months;  amount,  $1245.75;  rnaker,  Quaker  Shoe 
Company,  Philadelphia. 

No.  235. — Date,  Oct.  20th;  time,  2  months;  amount,  $754.25;  maker,  E.  F.  Woods 
&  Co.,  Providence,  R.  I. 

No.  23G. — Date,  Nov.  15th;  time,  30  days;  amount,  $2000;  maker,  Hub  Shoe  Com- 
pany, Boston. 

See  that  the  footing  of  the  Amount  column  in  your  bill  book  agrees  with  the  balance 
of  Bills  Receivable  account  in  your  main  ledger. 

Enter  the  following  notes  outstanding  on  the  bills  payable  side  of  5'our  bill  book,  and 
see  that  the  footing  of  the  Amount  column  agrees  with  the  balance  of  Bills  Payable  account 
in  your  main  ledger.     These  notes  will  be  presented  when  due. 

No.  174. — Date,  Nov.  ist,  in  favor  of  E.  J.  Leonard,  for  money  borrowed,  payable  at 
office  on  demand,  with  interest,  $5000. 

No.  175. — Date,  Nov.  loth,  in  favor  of  the  Commercial  Bank,  for  money  borrowed, 
payable  at  the  Commercial  Bank  in  30  days,  $3500. 

No.  176. — Date,  Nov.  20th,  in  favor  of  the  Commercial  Bank,  for  money  borrowed, 
payable  at  the  Commercial  Bank  in  30  days,  $5000. 

Procure  from  your  teacher  check  for  cash  balance,  $17582.78,  and  deposit  in  bank. 


246 


MODERN    ILLUSTRATIVE    BOOKKEEPINa 


Cash, 


Dr. 


Date. 

I,.  F. 

Xamk  and  Explanation. 

Accounts 
Receivable, 
Cr. 

Discount  on 

Sales, 

Dr. 

Net  Cash           Mdse. 
Received.            Sales. 

19c-. 
Nov. 

I 
2 

3 
3 
4 
4 
5 
5 
6 
6 
6 

4' 
4' 

Balance  in  bank 

Geo.  H.  Deane  &  Co.,  inv.  10,  20 

Mdse.  Sales 

New  Haven  Trading  Co.,  inv.  10/25 

Bills  Rec,  Bay  State  Shoe  Co.,  disc.  60  ds. 

Mdse.  Sales 

Dodge  &  Rice,  inv.  10/26 

Providence  Boot  &  Shoe  Co.,  on  «<; 

Marsh,  Fielding  Co.,  inv.  ii/l 

Bills  Pa}-.,  note  4  ni.  disc. 

Mdse.  Sales 

Accounts  Rec,                                             Cr. 

Mdse.  Sales,                                                    Cr. 

Discount  on  Sales,                                        Dr. 

Balance 

786 
1268 

942 

500 

I9S8 

40 
70 

80 

75 
65 

15 
25 

iS 

73 

37 

85 

13942 

770 

1243 
1500 

923 

500 

1988 

4200 

327 

1 

26 
67 

33 

95 
75 

49 

132 
126 

68 

60 

14 

75 

5486 

327 

49 

59 

95 

25396 

45 

Nov. 

T 

1670S 

35 

In  the  rooms  of  a  shoe  factory  each  operative  has  a  pass  book,  on  which  he  is  debited  for  all  work 
received,  and  credited  for  the  same  when  it  is  handed  back  finished.  These  pass  books  are  collected 
weeklv,  and  from  them  is  made  out  the  pay  roll,  which  is,  or  should  be,  certified  by  the  foremen  of  the 
various  rooms.  The  name  of  each  operative  is  entered  on  a  book  in  charge  of  the  paymaster,  or  book- 
keeper, if  the  bookkeeper  makes  up  the  pay  roll,  and  from  the  cash  he  takes  the  amount  called  for  oppo- 
site each  name,  and  places  the  amount  in  an  envelope  marked  with  the  name  of  the  operative  and  the 
amount  enclosed.     These  envelopes  are  placed  in  a  box  and  handed  to  the  foreman  of  each  room,  who 


VOUCHKR 


riVRTICrtAJtS  OF   IN-l'OICR. 

VorcnER 

Date OF 
Entry. 

Plant. 

No. 

Date. 

AMOrKT, 

VorciiERS 
Pav..  Cr. 

Terms. 

WnrN 

Pl'E. 

Amohnt. 
Vovcm.RS 
Pav..  Dr. 

Paid. 

In  Favor  of. 

EXFEANATION. 

Rc.ll 
Esl-ilc 

Mchy. 
and  Tools. 

Fur. 
ondFixt. 

2649 

Oct. 

I 

Oct. 

I 

654 

30 

Cash  5; 

Oct. 

I 

654 

3'^ 

Oct. 

I 

r.  L.  Marcy 

Salary  and  Expense 

2650 

1 

I 

576 

40 

4*     i« 

I 

576 

40 

I  J.  W.  Evans 

•• 

2651 

3 

Sept. 

25 

1200 

Net4in.,5/Io 

Oct. 

5 

1200 

5  Whiicomb  Lumber  Co. 

For  new  storehouse 

1200 

2652 

3 

Oct. 

I 

276 

21 

30  ds.,  2/C 

3 

276 

21 

J  J.  RussoU  &  Co. 

Hardware,  etc. 

•5° 

2653 

3 

2 

431 

62 

Cash 

2 

43' 

62 

2 

National  Welt  Co, 

Royalties 

2654 

5 

3 

1896 

75 

Ktt4ai.,5,c 

3 

1896 

75 

5 

Culler  &.  Porter 

Leather 

2555 

5 

5 

3600 

50 

Cash 

5 

3600 

50 

5 

ray  Roll 

2656 

5 

5 

64 

48 

" 

5 

64 

48 

5 

City  Carting  Co. 

I'rt.  for  week 

2657 

7 

4 

148 

64 

30  ds.,  2/10 

■7 

Boston  Last  Co. 

Lasts  and  ralterus 

2658 

8 

8 

250 

5r;  Cash 

8 

250 

8 

E.  A.  Conway  Co. 

Coal 

2659 

10 

10 

114 

68 

Cash 

10 

114 

68 

10 

McKay,  S.  M.  Co 

Royalties 

2G60 

12 

10 

62 

45 

60  ds.,  2/10 

22 

O'Ncil  Oil  Co. 

Oil  and  Waste 

2661 

12 

12 

3268 

50 

Cash 

12 

3268 

50 

ray  Roll 

2562 

14 

10 

36 

21 

5SCash 

14 

36 

21 

City  Gas  Co. 

Cos  aiij  Fixtures 

20 

2663 

14 

II 

28>|8 

78 

N*:t4m.,5'io 

SI- 

Collieson Bros. 

Leather 

2664 

M 

IVtty  Cash 

I'or  cash  drawer,  JI35 

2665 

■5 

'5 

62 

9' 

Cash 

Nov. 

'S 

62 

91 

City  Carting  Co. 

Krt  \o  date 

2666 

'5 

12 

645 

28 

30  ds. 

M 

\'iirick  Hiirdware  Co. 

Roofing,  etc. 

245 

28 

200 

— 

6} 

SO 

16187 

71 

1445 

28 

35» 

82 

50 

— 

— 

-- 

' 

' 

MODERN    ILLUSTRATIVE    BOOKKEEPING. 


247 


Cash, 


Cr. 


Vouchers 

Discount  ou 

CoUect'n  & 

Date. 

I,.  K. 

Name  and  Explanation. 

Payable, 
Dr. 

Purchases, 
Cr. 

Cash  Paid. 

Exchange, 
Dr. 

190-. 
Nov. 

I 

Voucher  ^$2749 

654 

30 

654 

30 

I 

=2750 

576 

40 

57^^ 

40 

2 

"         =2753 

431 

62 

431 

62 

2 

ColL  &  Exch.,  on  deposits 

75 

S 

Voucher  :;2752 

275 

21 

5 

52 

270 

69 

S 

ColL  &  Exch.,  ou  deposits 

I 

25 

4 

Discount,  Bay  State  Shoe  Co.  note 

15 

S 

Voucher  22751 

1200 

60        1 

1 140 

5 

=2754 

1896 

75 

94 

84 

1801 

91 

5 

::2755 

3600 

50  1 

3600 

50 

5 

::2756 

64 

48 

64 

48 

6 

Coll.  &  Exch.,  on  deposits 

3 

50 

6 

Discount,  note  at  4  in. 

43 

70 

6 

v' 

Petty  Cash,                                   per  P.  C. 
Vouchers  Pa^-able, 
Discount  on  Purchases, 

Coll.  &  Exch., 

B. 

Dr. 
Cr. 

Dr. 

84 
5 

50 

8700 

26 

160 

36 

• 

5 

5^ 

Balance,* 

16708 

35 

! 

25396 

45 

■""To  be  written  in  red  ink. 

distributes  them  to  the  operatives.  No  receipts  are  called  for  from  the  operatives,  though  in  small  fac- 
tories, where  only  a  few  employes  are  to  be  paid,  sometimes  each  operative  is  required  to  sign  his  name 
to  the  pay  roll,  acknowledging  the  receipt  of  the  amount  opposite  his  name.  A  few  companies  pay 
their  help  entirely  by  check,  and  the  check,  of  course,  acts  as  a  receipt;  but  in  nearly  all  large  establish- 
ments, where  a  great  many  employees  are  to  be  paid,  the  weekly  pay  roll  is  made  up  as  above  stated. 

REGISTER. 


DISTRIBUTION 

Ftrst  Cost, 

MANUFACrORING   EXPENSES. 

Sellino  Expenses. 

MiscELLANEoim  Accounts. 

I..F. 

MaleiUIs. 

labor. 

Frei'gbL 

ForemeH. 

Lasts 
and  rat. 

Mill 
Supplies. 

Fuel.  Light 
and  Oil. 

Royalties. 

Salesmen's 
Salaries. 

Salesmen's 
Expenses. 

Office 
Help. 

Name  of  Account. 

AMOUNt, 

1896 

289S 
87 

75 

78 
50 

2862 

3"3 

17 

50 

64 
62 

48 
91 

83 

S3 

148 

64 

76 
12 

37 

21 
45 

230 
50 

431 
114 

68 

450 
350 

204 
226 

30 
40 

72 
72 

* 

Expense. 
Officere"  Ra1an«s 

Expense 
Office  SappUes 

1 
1 

50 

583 

16 

12 

1 

33 

21 

05 

43Sjl 

o,( 

5975 

67 

137 

39 

166 

I4S 

64 

126 

16 

yM 

545 

30 

800 

430 

70 

144 

:  662 

04 

• 

" 

248  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

Xo.  1. — Dec.  I.     This  check  is  from  Sam  Stone  &  Co.,  paying  invoice  of  Nov.  2olh. 

Enter  the  check  in  ^-onr  cash  book,  crediting  5*.  Stone  &  Co.  for  the  full  amoimt  and 
debiting  Cash  and  Mercha^idise  Discount,  as  in  August  cash  book  (see  pages  i68  and  169). 
All  merchandise  discounts  will  be  handled  in  this  manner  in  the  following  transactions. 

Xo.  2. — Dec.  I.  This  is  the  regular  weekly  pay  roll.  It  has  been  made  up  by  the 
foremen  of  the  various  rooms,  whose  names  are  attached.  Number  this  voucher  2"/ go, 
and  prepare  a  voucher  to  accompany  it  on  a  regular  voucher  form.  On  the  back  of  the 
voucher  charge  to  L,abor  account,  Foremen's  Salaries,  Office  Help,  and  Officers'  Salaries, 
as  shown  on  the  pay  roll.  Make  out  a  check  to  the  order  of  Pay  Roll  for  the  amount 
called  for.     Procure  the  money,  and  place  it  in  Cash  Paid  Out. 

Enter  this  voucher.  No.  2790,  in  yovcc  voucher  register,  carrying  the  amount  into 
Vouchers  Paj-able  Cr.  and  into  Vouchers  Payable  Dr.  columns,  since  it  is  paid  the  same 
day  it  is  issued,  and  making  the  proper  distribution  in  the  special  columns.  In  your 
cash  book  credit  Cash  for  the  amount  of  the  voucher,  and  in  the  explanation  space  write 
Voucher  No.  2'/po.  No  further  explanation  is  required  in  the  cash  book,  since  a  reference 
to  the  voucher  register  will  give  full  particulars.     Write  all  voucher  numbers  in  red  ink. 

No.  3. — Dec.  I.     Invoice,  J.  H.  Steele  &  Co. 

This  bill  is  for  office  supplies,  and  as  it  is  a  small  bill,  with  no  discount  allowance,  you 
may  enter  it  on  a  voucher  and  make  out  a  check  for  the  amount;  attach  it  to  the  voucher, 
and  hand  the  voucher  and  the  check  to  your  teacher,  who  will  return  the  voucher  properly 
receipted  at  some  later  date.     On  the  back  of  the  voucher  charge  to  Office  Supplies. 

Enter  in  your  voucher  register  Vc  2ypi,  placing  the  name  of  the  account,  "Office 
Supplies,"  in  the  Miscellaneous  Accounts  column.  Enter  the  amount  of  the  voucher  in 
both  Vouchers  Payable  Cr.  and  Vouchers  Payable  Dr.  columns,  since  it  is  paid  the  same 
day  it  is  issued.  Enter  on  the  credit  side  of  your  cash  book  Dec.  i,  Voucher  No.  2jg)i, 
and  write  the  amount,  $2^.10,  in  both  Vouchers  Payable  and  Cash  Paid  columns. 

No.  4. — Dec.  I.  Salesman's  order  from  Dodge  &  Rice.  Enter  in  5-our  sales  book. 
Place  the  bill  in  Vouchers  for  Others  and  the  order  in  3'our  Voucher  File,  as  in  previous  sets. 

SeIvWng  Price  List  for  December. 

No.  76,   Goodj^ear  Welt,  per  pair,  $2.50 

No.  91,   Patent  Calf,  "  "  3.00 

No.  83,   Russia  Calf,  "  "  2.25 

No.  84,  Tan  Calf,  "  "  2.25 

No.  72,   Heavy  Walking  Shoe,  "  "  3.25 

No.. 94,   Kangaroo,  "  "  2.00 

No.  64,   Eadies'  Han/:1  Made  French  Kid,  "  "  3.50 

No.  66,         "            "          "      Patent  Calf,                                       "  "  3-50 

No.  68,         "       Dongola  Kid,  "  "  2.50 

AH  goods  are  sold  Ijy  case  of  36  pairs  each. 

The  above  prices  are  subject  to  discounts,  as  agreed  upon  by  the  salesmen.  All  sales- 
men's orders  call  for  the  goods  bj^  nunil)er.  Do  not  make  mistakes  in  filling  out  your 
bills,  or  in  making  entries  in  the  sales  book. 

No.  .*>. — Dec.  I.  Pay  Voucher  No.  2780.  Take  the  \(,)uelier  from  your  A'ouchers 
Payable  envelope,  detach  it  from  the  bill,  make  out  a  check  for  the  net  amount,  and  hand 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


249 


voucher  and  check  to  your  teacher.  Enter  the  amount  in  the  debit  cohimn  of  the  voucher 
register,  with  the  date  of  payment,  as  well  as  in  the  cash  book. 

In  paying  the  vouchers  of  this  set,  after  making  the  proper  entries  in  the  voucher 
register  and  the  cash  book,  you  will,  in  all  cases,  hand  the  voucher  and  the  check  to  your 
teacher,  or  to  such  person  as  he  may  designate  to  receive  them.  They  will  be  returned 
to  you  at  some  later  period,  and  j^ou  may  then  place  them  in  your  Vouchers  Paid  File. 

No.  6. — Dec.  I .  It  is  necessary  to  have  some  ready  cash  for  small  items  paid  from 
day  to  day,  and  these  items  will  be  recorded  in  what  is  known  as  the  petty  cash  book. 
This  is  a  branch  of  the  regular  cash  book,  and  its  debit  side  will  be  made  up  entirely  of 
checks  drawn  for  petty  cash,  while  its  credit  side  will  be  made  up  of  various  small  items. 
By  the  use  of  this  book  the  main  cash  book  is  more  easily  audited,  since  its  credit  side 
will  be  made  up  entirely  of  checks. 


Form   of  Voucher. 


To 


Cash 


Voucher  no. 


Dr. 


34  26 


THE  .  . 


W.  J.  Hilton  Shoe  Co, 


Terms : 


Manufacturers  of 


BOOTS   AND   SHOES. 


Petty    cash 


25 


I  hereby  certify  that  the  above  liability  was  con- 
tracted for  the  W.  J.  Hilton  Shoe  Co.,  and  that  the 
goods  have  been  received. 


Rec.  Clerk. 


Prices  correct. 


Buyer. 


Distribution     and    calculations    correct 
and  vouchers  entered. 

Bookkeeper. 


Approved  for  payment. 


Gen.  Manager. 


Received  .  190       ,  of  The  W.  J.  HILTON  SHOE  CO., 

- _ Dollars, 

in  full  settlement  of  account  as  above. 

$  --- _ 


PLEASE    DATE.   SIGN,    AND    RETURN     PROMPTLY. 


250 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Under  a  voucher  system  of  bookkeeping,  cash  for  the  petty  cash  book  should  be  obtained 
by  a  voucher  order  from  the  manager. 

Whenever  cash  is  to  be  balanced,  the  footing  of  Sundries  column  in  the  petty  cash 
book  should  be  transferred  to  the  credit  side  of  the  main  cash  book  into  Cash  Paid  colunui, 
with  the  explanation,  Petty  Cash,  per  P.  C.  B.,  and  a  check  mark  placed  in  the  ledger 
folio  column,  to  show  that  these  items  have  been  posted  from  the  petty  cash  book. 

The  form  on  page  249  illustrates  a  petty  cash  voucher. 

No  distribution  is  required,  as  the  distribution  will  be  determined  bj-  the  entries  in  the 
petty  cash  book  itself.  A  cash  check  should  be  written  for  the  amount.  The  cash  should 
be  handed  to  the  bookkeeper. 

Voucher  No.  2792  is  an  order  signed  by  the  manager.  Enter  in  your  voucher  register, 
but  do  not  extend  the  amount  (see  similar  entry  in  model  voucher  register,  pages  246  and 
247) .  Make  out  a  cash  check  for  the  amount.  Place  the  voucher  in  your  Receipted  \^oucher 
File.  Take  the  check  to  the  bank,  or  to  your  teacher,  and  get  the  money,  which  place 
in  3^our  Petty  Cash  Draw^er.  This  transaction  requires  no  cash  book  entry,  as  no  cash  has 
left  the  business;  it  is  simply  taken  from  the  bank  and  placed  in  the  Petty  Cash  Drawer 
for  future  use.     Enter  the  amount  of  the  check  in  the  Dr.  column  of  your  pettj-  cash  book. 

The  following  form  illustrates  the  petty  cash  book. 


Petty  Cash  Book. 


Petty  Cash. 


Dr. 


Cr. 


Date. 

I..F. 

Explanation. 

Cash  Rec'd. 

Accts.  Rec. 

Expense. 

Sundries. 

Nov. 

I 

3 
4 
4 
5 
5 
6 
8 
8 

9 

10 

12 

Check 

Office  Supplies,  stamps  &  postals 

Washing  windows 

Soap  &  towels 

Telephone  charges,  October 

W.  U.  Tel.  Co.,  October  charges 

W.  G.  Allen  &  Co.,  protest  fees 

Check 

C.  M.  Carter  &  Co.,  overpaid 

Scrubbing  floors 

Office  Supplies,  500  stamped  envelopes 

Wallace  Bros.,  protest  fees 

Accts.  Rec,                                                   Dr. 

Expense,                                                         Dr. 

30 
25 

3 
I 

2 

00 

00 

50 

2 

5 

7 

6 

75 
75 
75 
45 

50 

1 

10 

6 
23 

50 
50 

6 

50 

50 

23 

20 

20 

15 

Balance,* 
Balance, 

30 

— 

II 

30 

55 

55 

Nov. 

II 

*To  be  written  in  red  ink. 

>fo.  7. — Dec.  3.     Salesman's  order,  Hamilton,  Brown  Shoe  Co.     (See  instructions  for 
No.  4.; 

Telegraphic  order,  E.  F.  Woods  &  Co.      (Enter  in  sales  book.  ) 

Voucher  No.  2793.     This  bill  is  for  salesman's  salary-  and  expenses 
for  November. 

Make  out  a  voucher,  charging  to  Salesmen's  Salaries  and  Salesmen's  Expenses.     Make 
out  a  check  for  the  amount,  and  enter  in  voucher  register  and  cash  book. 


No.  S. — Dec.  3. 
No.  J).— Dec.  -\. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  251 

Xo.  lO. — Dec.  3.     Voucher  No.  2794.      (Proceed  exactly  as  in  No.  9.) 

Xo.  11. — Dec.  3.     Invoice,  F.  C.  Perkins,  voucher  No.  2795. 

Make  out  a  voucher  for  this  bill,  attach  it  to  the  bill,  and  enter  in  your  voucher  register. 
Place  the  voucher  and  the  bill  in  your  Invoice  File.  Write  Mill  Supplies  in  Miscellaneous 
Accounts  column  of  your  voucher  register. 

Xo.  12. — Dec.  3.  Invoice,  Gas  &  Electric  Co.,  voucher  No.  2796.  (See  instructions 
for  No.  II.)     Charge  to  Expense  in  distribution. 

Xo.  13. — Dec.  3.  Invoice,  E.  A.  Conway  Coal  Co.,  voucher  No.  2797.  Proceed  as 
in  No.  II,  and  charge  to  Fuel,  Light  and  Oil. 

Xo.  14. — Dec.  3.  Invoice,  Western  Leather  Co.,  voucher  No.  2798.  Charge  to 
Materials. 

Xo.  15. — Dec.  3.  Deposit  check  of  Sam  Stone  &  Co.;  collection,  75'/.  Pa}^  vouchers 
Nos.  2796,  2797,  2781  and  2785  by  check. 

Take  the  vouchers  from  your  A'oucher  File,  make  out  a  check  for  each  amount,  and 
hand  vouchers  and  checks  to  j'our  teacher,  or  to  the  person  designated.  INIake  the  proper 
entries  in  j-our  cash  book  and  in  ^-our  voucher  register. 

Xo.  10. — Dec.  3.  Enter  each  item  in  your  petty  cash  book,  debiting  Expense  for  the 
amounts.      (See  form  of  pettj'  cash  book,  page  250.) 

Xo.  17. — Dec.  3.  This  check  is  received  from  Pond  &  Eaton.  Enter  on  the  debit 
side  of  the  cash  book;   the  amount  is  net. 

Xo.  18. — Dec.  4.  Leave  for  collection  at  the  Commercial  Bank  the  note  of  the  Provi- 
dence Boot  &  Shoe  Co.  Make  the  proper  indorsement,  and  enter  short  in  3'our  bank  pass 
book. 

Xo.  19. — Dec.  4.     Invoice,  J.  Russell  &  Co.,  voucher  No.  2799. 

Make  out  voucher  and  attach  to  the  bill;  also  make  out  check  for  the  amount  of  the 
bill.  Enter  in  3-our  ^•oucher  register,  and  hand  bill,  voucher  and  check  to  your  teacher. 
Charge  to  Mill  Supplies. 

Xo.  20. — Dec.  4.     Salesman's  order.  Marsh,  Fielding  Co. 

Xo.  21. — Dec.  5.  This  check  is  received  from  the  Providence  Boot  &  Shoe  Co.,  to 
appl}^  on  account. 

Xo.  22. — Dec,  5.  Draw,  at  sight,  on  Hamilton,  Brown  Shoe  Co.,  St.  Louis,  for 
$4875.20,  and  deposit  this  draft  with  the  checks  of  Pond  &  Eaton  and  Providence  Boot 
&  Shoe  Co.  in  the  Commercial  Bank.  Receive  credit  for  the  sight  draft,  as  well  as  for 
the  checks.  Enter  the  amount  of  the  draft  on  the  debit  side  of  your  cash  book,  and  add 
to  5^our  bank  balance.  Pay  for  collection  $6.75.  Deduct  this  amount  from  the  deposit 
on  the  deposit  ticket,  and  enter  on  the  credit  side  of  your  cash  book  in  Collection  & 
Exchange  column. 

Xo.  23. — Dec.  5.     Telegraphic  order  from  Dodge  &  Rice.      (Enter  in  sales  book.) 
Xo.  24. — Dec.  5.     Pay  vouchers  Nos.  2788  and  2789.     Make  out  the  checks  and  hand 
with  vouchers  to  3'our  teacher.     Enter  amounts  in  voucher  register  and  cash  book. 

Xo.  25. — Dec.  5.     Invoice,  Chas.  Koss  »&  Bro.,  voucher  No.  2S00.    Charge  to  Materials. 

Xo.  26. — Dec.  5.  Statement  of  United  Shoe  Machinery  Co.,  voucher  No.  2S01,  for 
roj-alties  during  November.  The  machines  register  7014  pairs  at  4''-  per  pair.  Make  out 
a  check  for  this  amount.     Charge  to  Roj-alties. 


252  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

No.  27. — Dec.  5.  Invoice,  A.  D.  Jackson  Saddlery  Co.,  voucher  No.  2802.  Make 
out  a  check  for  this  voucher,  less  5^,  in  payment  of  the  invoice.  Charge  to  Materials. 
This  check  is  an  overdraft  (see  Nos.  70  and  73,  pages  158  and  159). 

Xo.  28. — Dec.  6.  Invoice,  Parr}^  Bros.,  No.  2803.     Charge  to  Real  Estate. 

Xo.  2t). — Dec.  6.  Invoice,  Cutler  &  Porter,  No.  2804.     Charge  to  Materials. 

No.  30. — Dec.  6.  Salesman's  order,  Geo.  H.  Deane  &  Co. 

No.  31. — Dec.  6.  Cash  sale,  J.  T.  Ferris,  i  case  ^']6  at  $2.50  per  pair. 

Enter  the  sale  in  the  sales  book,  carrying  the  amount  into  the  Cash  column.  Place  a 
check  mark  in  the  ledger  folio  column,  to  show  that  no  debit  posting  is  made  from  the 
sales  book.  Enter  in  the  cash  book  on  the  debit  side,  in  Merchandise  Sales  column, 
checking  the  entry,  to  show  that  no  credit  posting  is  made  from  the  cash  book.  By  this 
entry  Cash  is  debited  and  Merchandise  Sales  credited  for  each  cash  sale. 

No.  32. — Dec.  6.  Enter  in  3'our  petty  cash  book.  (Debit  Office  Supplies  for  the 
stamps. ) 

No.  33.— Dec.  7.  Invoice,  F.  A.  Walsh  &  Co.,  No.  2805.  Charge  $145. 10  to  Mate- 
rials, and  $125  to  Machinery. 

No.  34. — Dec.  7.     Salesman's  order.  Rich,  I^antz  &  Harris. 

No.  35. — Dec.  7.     Salesman's  order.  New  Haven  Trading  Co. 

No.  36. — Dec.  7.  Dodge  &  Rice  pay  their  bill  of  Aug.  4th,  due  Dec.  4th,  by  sending 
a  check  for  one-half  the  amount  and  their  note  at  10  daj^s,  with  interest  added,  for  the 
balance.  A  letter  of  explanation  accompanies  the  check  and  note.  Debit  Cash  in  the 
cash  book,  and  in  the  journal  debit  Bills  Receivable  and  credit  Dodge  &  Rice  and  Interest. 

No.  37. — Dec.  7.     Check  received  from  the  Hub  Shoe  Co.,  less  2^. 

No.  38. — Dec.  8.  Draw,  at  sight,  on  E.  M.  Lyons  &  Co.  for  the  amount  of  balance 
due,  $628.50.  Place  the  draft  in  your  bank  for  collection,  together  with  a  deposit  of  cash, 
$90,  and  the  checks  of  Dodge  &  Rice  and  the  Hub  Shoe  Co.  Collection,  $5.50.  Do  not 
forget  to  deduct  the  amount  of  collection  on  the  deposit  ticket,  and  to  make  proper  entry 
in  the  cash  book.     Notify  E.  M.  Eyons  &  Co.  by  letter  that  j'ou  have  drawn  on  them. 

No.  39. — Dec.  8.  Pay  roll,  No.  2806.  This  is  the  regular  weekly  pay  roll.  Make 
a  voucher,  draw  the  check,  and  j^lace  the  cash  in  Cash  Paid  Out.  (Enter  in  voucher 
register  and  cash  book.) 

No.  40. — Dec.  8.  Invoice,  Diebold  Safe  Co.,  No.  2807.  Draw  a  check  for  the  amount 
and  make  proper  entries  in  the  cash  book  and  the  voucher  register.  Charge  to  Furniture 
&  Fixtures. 

No.  41. — Dec.  8.     Salesman's  order,  E.  F.  Woods  &  Co. 

No.  42. — Dec.  8.  Cash  sale  (check),  W.  M.  Lee  &  Co.,  i  case  each  266  at  $3.50  and 
II94  at  $2.00.      (See  instructions  for  No.  31.) 

No.  43. — Dec.  8.     Check  received  from  Pittsburg  Furnishing  Co.,  less  2t. 

No.  44. — Dec.  8.     Check  received  from  New  Haven  Trading  Co.,  less  2'"/. 

No.  45, — Dec.  10.     Invoice,  Western  Leather  Co.,  No.  2808.     Charge  to  Materials. 

No.  4«. — Dec.  10.     Invoice,  Chas.  Koss  &  Bro.,  No.  2809.  "  Charge  to  Materials. 

No.  47. — Dec.  10.     Check  received  from  Geo.  H.  Deane  ^S:  Co. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  253 

No.  48. — Dec.  lo.  Deposit  checks  of  W.  M.  Lee  &  Co.,  Pittsburg  Furnishing  Co., 
New  Haven  Trading  Co.,  and  Geo.  H.  Deane  &  Co.     Collection,  $8.25. 

No.  49. — Dec.  10.  Note  favor  of  Commercial  Bank  for  $3500,  due  this  da}-,  has  beei? 
charged  to  your  account.  Make  the  proper  entrj-  in  your  cash  book,  and  deduct  the  amount 
from  the  balance  in  the  check  book. 

No.  50. — Dec.  10.     Pa}-  vouchers  Nos.  2795,  2783,  2782  and  2798. 

No.  51. — Dec.  II.     Invoice,  Collieson  Bros.,  No.  2810.     Charge  to  Materials. 

No.  52. — Dec.  11.     Salesman's  order,  Bay  State  Shoe  Co. 

No.  52a. — Dec.  11.  W.  J.  Hilton  has  sold  to  James  Daniels  25  shares  of  his  stock, 
and  given  him  a  transfer,  and  R.  H.  Merriam  has  sold  his  $1000  worth  of  stock  to  the 
same  person. 

Enter  in  the  transfer  book,  and  post  to  the  stock  ledger,  debiting  the  seller  and  cred- 
iting the  purchaser  of  stock  in  each  case  for  the  number  of  shares  purchased  at  par  value. 
These  transactions  affect  only  the  stock  books.  Cancel  the  old  stock  certificates  of  W.  J. 
Hilton  and  R.  H.  Merriam,  and  issue  a  new  certificate  to  W.  J.  Hilton  for  the  amount  of 
stock  he  now  holds;  also  issue  a  new  certificate  to  James  Daniels  for  35  shares  of  stock. 

No.  53. — Dec.  12.  Invoice,  O'Neil  Oil  &  Paint  Co.,  No.  2811.  Charge  to  Fuel, 
Light  and  Oil. 

No.  54. — Dec.  12.  Cash  sale,  Jones  &  Allis,  18  pairs  each  i.']6  at  $2.50,  ^83  at  $2.25, 
t:84at$2.25,  ^94  at  $2. 

No.  ^^. — Dec.  12.     Check,  Dodge  &  Rice,  in  payment  of  invoice  of  Dec.  ist. 

No.  56. — Dec.  12.  Note  of  the  Providence  Boot  &  Shoe  Co.,  due  Dec.  9th,  has  been 
protested  for  non-payment,  and  the  note  returned  to  you  by  the  bank.  The  protest  fees 
are  $2.50,  which  }-ou  will  pay  in  cash  from  the  Petty  Cash  Drawer.  Place  the  amount  in 
Cash  Paid  Out.  Charge  the  same  to  the  Providence  Boot  &  Shoe  Co.  in  the  Accounts 
Receivable  column  of  the  petty  cash  book,  and  post  direct  to  their  account  in  the  customers' 
ledger.     No  entry  is  required  for  the  note,  since  it  was  merely  left  for  collection. 

Write  to  the  Providence  Boot  &  Shoe  Co.,  requesting  an  explanation  of  the  fact  that 
their  note  has  been  allowed  to  go  to  protest. 

No.  57. — Dec.  12.  Deposit  check  of  Dodge  &  Rice;  collection,  $3.90.  Pay  vouchers 
Nos.  2784,  2800  and  2811. 

No.  58. — Dec.  13.  Voucher  No.  2812,  $25,  for  petty  cash.  Enter  in  voucher  register 
and  petty  cash  book.  Make  a  cash  check  for  the  amount.  Obtain  the  cash  and  place  it 
in  your  Petty  Cash  Drawer  (see  transaction  No.  6).      (No  distribution.) 

No.  50. — Dec.  13.  Invoice,  A.  D.  Jackson  Saddlery  Co.,  No.  2813.  Make  a  check 
for  this  voucher,  and  enter  in  voucher  register  and  cash  book.     Charge  to  Materials. 

No.  GO. — Dec.  13.  Letter  from  Hamilton,  Brown  Shoe  Co.,  St.  Louis,  ordering  goods 
at  special  price.  You  will  accept  their  offer  by  wire  and  make  out  the  invoice.  Enter  in 
the  sales  book,  with  terms  ic^  cash. 

No.  01. — Dec.  13.  Letter  enclosing  check  and  interest-bearing  note  from  the  Bay 
State  Shoe  Co.,  in  settlement  of  invoice  of  Nov.  25th. 

Enter  the  amount  of  the  check  and  the  merchandise  discount,  3  r  of  the  full  amount, 
in  the  cash  book,  crediting  Bay  State  Shoe  Co.  for  the  total.  Enter  the  note  in  the  journal, 
crediting  Bay  State  Shoe  Co.  for  the  amount  of  same. 


254  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

JJo-  62. — Dec.  14.     Cash  sale,  Chas.  D.  Pomeroy,  i  case  S64  at  $3.50. 

No.  63. — Dec.  14.     Pay  vouchers  Nos.  2803  and  2804. 

No.  64. — Dec.  14.  You  have  received  check  for  $2000,  to  pay  note  of  the  Hub  Shoe 
Co.,  due  to-morrow.  Take  the  note  from  j^our  Cash  Drawer,  write  Paid  across  the  face, 
and  place  it  in  Vouchers  for  Others. 

No.  65. — Dec.  14.  Place  in  the  bank,  for  collection,  E.  F.  Woods  &  Co's  note,  due 
the  20th;  also  Dodge  &  Rice's  note,  due  this  day.  Have  the  Quaker  Shoe  Co's  note,  due 
Jan.  15th,  discounted,  and  the  net  proceeds  placed  to  your  credit;  also  have  the  amount 
of  Dodge  &  Rice's  note  placed  to  your  credit.  Have  E.  F.  Woods  &  Co's  note  entered 
short  in  your  bank  pass  book.  Add  the  proceeds  of  notes  placed  to  your  credit  to  your 
bank  balance  on  the  stub  of  j-our  check  book,  and  make  the  proper  cash  book  entries. 

When  notes  already  due  are  placed  in  the  bank  for  collection,  it  is  customary,  if  the  depositor  is  in 
good  standing,  to  give  him  credit  for  the  amo^mt  due  at  the  time  of  deposit,  if  he  so  requests. 

Deposit  cash,  $288,  and  the  checks  of  Eay  State  Shoe  Co.  and  Hub  Shoe  Co.  Collec- 
tion, $4.00. 

No.  66. — Dec.  15.     Invoice,  B.  S.  Green  Co.,  No.  2814.     Charge  to  Materials. 

No.  67. — Dec.  15.     Pay  roll.  No.  2815. 

No.  68. — Dec.  15.     Salesman's  order,  Sam  Stone  &  Co. 

No.  61). — Dec.  15.     Check,  Rich,  Eantz  &  Harris. 

This  accotmt  of  Oct.  3d  is  not  due  until  Jan.  ist,  but  the  firm,  having  the  ready  money, 
have  discounted  their  bill  for  the  time  it  has  yet  to  run  (19  days)  at  6', ,  and  sent  j'ou  a 
check  for  the  balance.  See  if  the  discount  is  correct,  and  if  so,  enter  as  usual  in  your 
cash  book. 

No.  70. — Dec.  15 

No.  7  1. — Dec.  15 

No.  72. — Dec.  15 
Dec.  3d. 

No.  73. — Dec.  15 

Xo.  74. — Dec.  15 


Check,  E.  F.  Woods  &  Co.,  in  payment  of  invoice  of  Dec.  3d. 
Check,  Marsh,  Fielding  Co.,  in  settlement  of  invoice  of  Nov.  loth. 
Check,   Hamilton,   Brown   Shoe   Co.,   in  payment   of  invoice  of 


Pay  voucher  No.  2805. 

Pay  petty  cash  items.  (Debit  Office  Supplies  for  the  postal  cards. ) 
The  bank  has  notified  you  that  your  draft  on  E.  INI.  Lyons  &  Co.  has  been  protested  for 
non-payment,  and  you  pay  the  protest  fees,  $1.50,  in  cash  from  your  petty  cash  drawer, 
debiting  E.  M.  Lyons  &  Co.  (see  transaction  No.  56). 

No.  75. — Dec.  17.  Invoice,  H.  M.  Sciple  &  Co.,  No.  2816.  Charge  to  Machinery  & 
Tools. 

No.  7(». — Dec.  17.  Salesman's  order,  Pond  6c  IvUon. 

>-,,.  77. — Dec.  17.  Check,  Dodge  6c  Rice,  in  settlement  of  invoice  of  Dec.  ^Ih,  less  2'r. 

^K>.  7H.— Dec.  17.  This  letter  from  E.  M.  Lyons  &  Co.  explains  thai  by  mistake 
your  draft  on  them  was  iK-rmitted  to  go  to  i)rotest.  They  enclose  a  cliLck  tor  ihe  amount 
of  the  draft  and  the  protest  fees.     luiler  in  the  cash  book,  crediting  /:".  M.  Lyons  &  Co. 

Deposit  this  check,  together  with  all  the  other  checks  in  your  possession  (6).  Collec- 
tion and  exchange,  $13.50. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  255 

No.  79. — Dec.  17.  I^etter  from  Providence  Boot  &  Shoe  Co.  This  letter  announces 
the  failure  of  the  Providence  Boot  &  Shoe  Co.,  and  contains  an  offer  of  6o'i  cash  in  full 
payment  of  all  indebtedness.  Write  a  letter  to  them,  expressing  your  regret  at  their 
failure,  and  accepting  their  ofFer  of  60'/  on  a  dollar  for  your  book  claim  and  their  note 
protested  the  12th. 

No.  80. — Dec.  18.  Sale,  sample  lot,  to  E.  B.  Lewis  &  Co.  Send  them  three  pairs  of 
each  number,  except  272,  which  is  not  in  stock. 

No.  81. — Dec.  18.     Check,  Geo.  H.  Deane  &  Co.,  in  payment  of  invoice  of  Dec.  6th. 
No.  82. — Dec.  18.     Pa)-  vouchers  Nos.  2808  and  2809. 

No.  83.— Dec.  19.  Invoice,  J.  H.  Steele  &  Co.,  No.  2817.     Charge  to  Mill  Supplies. 

No.  84. — Dec.  19.  Invoice,  F.  A.  Walsh  &  Co.,  No.  2818.     Charge  to  Materials. 

No.  85. — Dec.  19.  Salesman's  order,  Pittsburg  Furnishing  Co. 

No.  86. — Dec.  19.  Check,  Quaker  Shoe  Co.,  in  settlement  of  invoice  of  Nov.  15th. 

No.  87. — Dec.  19.  Petty  cash  book  entries.      (Debit  OJjce  Supplies  for  the  pencils.) 

No.  88. — Dec.  20.  Invoice,  Boston  Last  Co. ,  No.  2819.    Charge  to  Lasts  and  Patterns. 

No.  89. — Dec.  20.  Cash  sale,  R.  S.  Sherwood  &  Co.,  6  pairs  each  ^76  at  $2.50,  ::9i 
at  $3.00,  #83  at  $2.25,  IS4  at  $2.25. 

No.  90.— Dec.  20.     Order  from  Bay  State  Shoe  Co. 

No.  91. — Dec.  20.  Letter  and  check  from  New  Haven  Trading  Co.  This  transaction 
is  similar  in  principle  to  No.  109,  page  123  (see  explanation). 

No.  92. — Dec.  20.     Deposit  $60  cash  and  all  checks  on  hand  (3).     Collection,  $8.90. 

No.  93. — Dec.  20.  Your  note,  due  this  day,  favor  of  Commercial  Bank,  has  been 
charged  to  your  account.  Enter  in  your  cash  book,  and  deduct  the  amount  from  the 
balance  on  the  stub  of  your  check  book. 

No.  94. — Dec.  21.  Invoice,  Western  Leather  Co.,  No.  2820.     Charge  to  Materials. 

No.  95. — Dec.  21.  Salesman's  order.  Hub  Shoe  Co. 

No.  96.— Dec.  21.  Check,  E.  F.  Woods  &  Co.,  in  payment  of  bill  of  Dec.  8th. 

No.  97. — Dec.  22.  Paj'  roll,  No.  2821. 

No.  98. — Dec.  22.  Cash  sale,  Hudson  &  Foster,  9  pairs  each  '64  at  $3.50,  ::66  at 
$3.50,  i|68  at  $2.50. 

No.  99. — Dec.  24.     Invoice,  Chas.  Koss  &  Bro.,  No.  2822.     Charge  to  Materials. 

No.  100. — Dec.  24.     Salesman's  order.  Empire  Shoe  Co. 

No.  101. — Dec.  24.  Check,  Providence  Boot  &  Shoe  Co.  This  amount  is  sent  in 
full  payment  of  the  bill  of  Oct.  5th,  as  shown  by  the  account  of  the  Providence  Boot  & 
Shoe  Co.  in  your  customers'  ledger,  $1042.50,  and  their  note  protested  Dec.  12th,  $895. 
The  check  is  for  Go't  of  these  two  amounts. 

Enter  in  the  cash  book,  crediting  Providence  Boot  &  Shoe  Co.  for  $625.50  and  Bills 
Receivable  for  $537.  You  have  lost  40"^  of  the  note,  $358;  also  40"^  of  the  Providence  Boot 
&  Shoe  Co's  bill  of  Oct.  5th,  $417;  also  a  charge  of  $2.50  against  the  Providence  Boot  & 
Shoe  Co.  made  when  their  note  was  protested.  Losses  from  bad  debts  are  provided  for 
by  a  Reserve  for  Bad  Debts  account,  which  is  credited  at  the  end  of  each  j^ear  with  a 
certain  proportion  of  the  profits  of  the  business,  and  charged  with  such  losses  as  may 


256  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

occur  during  the  3-ear.  Therefore,  in  your  journal  make  an  entry,  debiting  Reserve  for 
Bad  Debts  for  the  total  loss,  and  crediting  Providence  Boot  &  Shoe  Co.  for  the  loss  on  the 
book  claim  plus  the  protest  fees,  and  Bills  Receivable  for  the  loss  on  the  note. 

No.  102. — Dec.  24.     Paj-  vouchers  Nos.  2786,  2787  and  2810. 

Xo.  103. — Dec.  24.  Dej)osit  cash,  $85.50,  and  the  two  checks  on  hand.  Collection, 
$2.25.  The  note  of  E.  F.  Woods  &  Co.  ($754.25),  which  was  left  for  collection,  has  been 
paid.  Have  the  amount  placed  to  your  credit  in  your  bank  pass  book.  (Enter  in  cash 
book.) 

No.  104. — Dec.  26.     Invoice,  J.  Russell  &  Co.,  No.  2823.     Charge  to  Mill  Supplies. 

No.  10.">. — Dec.  26.     Invoice,  Collieson  Bros.,  No.  2824.     Charge  to  Materials. 

No.  10(>. — Dec.  26.     Salesman's  order,  The  John  Warner  Co. 

No.  107. — Dec.  26.     Salesman's  order,  Quaker  Shoe  Co. 

No.  lOJS. — Dec.  26.     Order  from  Pittsburg  Furnishing  Co. 

No.  lot). — Dec.  26.  Check,  E.  F.  Woods  &  Co.,  in  paj^ment  of  invoice  of  Nov. 
24th. 

No.  110. — Dec.  26.  Check,  Sam  Stone  &  Co.,  in  settlement  of  bill  of  Dec.  15th. 

No.  111. — Dec.  26.  Check,  Hamilton,  Brown  Shoe  Co.,  in  paj'ment  of  invoice  of 
Dec.  13th. 

No.  112. — Dec.  27.  Invoice,  Cutler  &  Porter,  No.  2825.     Charge  to  Materials. 

No.  113. — Dec.  27.  Salesman's  order,  Sam  Stone  &  Co. 

No.  1 14. — Dec.  27.  Check,  Rich,  lyantz  &  Harris,  in  payment  of  invoice  of  Dec.  7th. 

No.  115. — Dec.  27.  Check,  New  Haven  Trading  Co.  This  check  is  in  paj-ment  of 
the  balance  of  the  New  Haven  Trading  Co's  bill  of  Dec.  7tli.  The}-  deduct  I'V,  as  it  is 
paid  50  days  before  the  account  is  due.     You  will  allow  the  deduction. 

No.  1 16. — Dec.  27.      Pay  voucher  No.  2818. 

No.  117. — Dec.  28.     Cash  sale,  B.  F.  Howe  &  Co.,  9  pairs  each  272  at  $3.25,  ::94  at  $2. 

No.  117a. — Dec.  28.  Memorandum  of  goods  returned.  The  Hub  Shoe  Co.  have 
returned  10  cases  of  ^83,  invoiced  Dec.  21st,  as  they  already  have  a  large  stock  of  this 
number  on  hand,  and  have  arranged  with  our  salesman  to  ha\-e  us  take  them  back.  Debit 
Mercha7idise  Returned  and  credit  Hzib  Shoe  Co.  in  the  journal. 

No.  118. — Dec.  28.     Pay  voucher  No.  2817. 

No.  110. — Dec.  28.  Deposit  cash,  $47.25,  and  all  the  checks  on  hand  (5).  Collec- 
tion, $8.00. 

No.  120.— Dec.  29.  Pay  roll.  No.  2826. 

No.  121. — Dec.  29.  Salesman's  order,  E.  M.  Lyons  &  Co. 

No.  122. — Dec.  29.  Telegraphic  order,  Rich,  Lantz  &  Harris. 

No.  123.— Dec.  29.  Check,  Bay  State  Shoe  Co. 

The  Bay  State  Shoe  Co.  ha\-e  made  a  mistake  of  one  dollar  in  their  calculations,  and 
have  overpaid  you  this  amount.  Write  them  a  letter,  notifying  tlKin  of  the oxerpaymcnt. 
Credit  Bay  Stale  Shoe  Co.  in  the  cash  l)ook  for  the  payment  of  the  invoice  of  Dec.  nth, 
with  the  correct  discount,  $86.13,  ''i"<^^  ^^^'^  "<-*l-  amount  of  cash.  $2784.87.     l-udenieath 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  257 

this  entry,  credit  Bay  State  Shoe  Co.  for  the  $i  overpaid,  writing  the  amount  in  the 

Accounts  Receivable  and  the  Cash  columns. 

There  are  two  methods  of  treating  overpayments.  Some  business  houses  always  return  a  check  or 
ciurency  for  the  overpayment,  but  if  it  is  a  customer  who  has  an  open  account,  a  more  common  method 
is  simply  to  credit  the  customer  for  the  amount  overpaid,  as  in  the  above  instance. 

No.  124. — Dec.  29.     Pay  voucher  No.  2820. 

Xo.  125. — Dec.  29.     Pett}'  cash  items.      (Debit  Office  Sicpplies  for  the  postal  cards.; 
No.  12G. — Dec.  31.     Salesman's  order,  Marsh,  Fielding  Co. 

No.  127. — Dec.  31.  Cash  sale,  W.  P.  Hoyt  &  Co.,  3  pairs  each  §76  at  $2.50,  l-s^i  at 
$3.00,  1:83  at  $2.25,  i:84  at  $2.25. 

No.  128. — Dec.  31.     Pay  voucher  No.  2S22. 

No.  120. — Dec.  31.  Bill  from  City  Carting  Co.,  No.  2827,  freight  and  cartage  for  the 
month  of  December.     Charge  to  Freight.     Make  out  a  check  for  the  amount  of  the  bill. 

NO.  130. — Dec.  31.  Memorandum  of  goods  returned.  The  Empire  Shoe  Co.  have 
returned  two  cases  of  ^72,  invoiced  Dec.  24th,  as  the  goods  are  imperfect.    Allow  the  claim. 

No.  131. — Dec.  31.  Invoice,  Mead,  Mason  &  Co.,  No.  2828.  Charge  to  Repairs. 
Make  out  a  check  for  the  amount  of  the  bill. 

No.  132. — Dec.  31.  Deposit  cash,  $30,  and  the  check  of  the  Bay  State  Shoe  Co. 
Collection,  $2.75. 

No.  133. — Dec.  31.  You  may  allow  25'f  of  the  cost  of  lasts  and  patterns,  12^,^  of 
the  cost  of  machinery,  and  lOr  of  the  cost  of  furniture  and  fixtures  for  depreciation. 
Make  a  journal  entry,  debiting  Depreciation  for  the  full  amount,  and  crediting  Furniture 
&  Fixtures,  Lasts  &  Patterns,  and  Machinery ,  each  for  its  respective  amount. 

Bookkeepers  differ  in  their  treatments  of  such  accounts  as  Machinery,  Furniture  &  Fixtures,  and 
Lasts  &  Patterns.  The  practice  is  far  too  common,  of  considering  the  balances  of  such  accounts  as 
resources,  without  any  regard  to  the  fact  that  they  do  depreciate  in  value.  Such  a  practice  is  most  inac- 
curate, for,  while  it  may  be  argued  that  such  property  has  cost  the  amount  of  its  debit,  and,  being  on 
hand  and  kept  in  repair,  is  a  resource  for  this  amount,  still  it  is  well  known  that  machinery  deteriorates 
rapidly  when  r'ln  at  the  high  speed  of  our  modern  factories,  and  the  inventive  genius  of  American 
mechanics  makes  it  constantly  necessar}-  to  throw  aside  comparatively  new  machinerv-  and  replace  it  with 
the  latest  product  of  invention. 

Perhaps  the  most  common  method  of  handling  such  accovmts  is  to  take  an  inventory  at  the  end  of 
each  5-ear,  but  unless  great  care  is  taken,  machinery  is  frequently  overvalued,  and  it  is  better  to  keep  a 
regular  Depreciation  account  in  the  general  ledger,  and  charge  this  account  a  certain  percentage  of  such 
accounts  at  the  end  of  each  year  tlirough  a  journal  entry.  When  this  is  done,  the  balances  of  these 
accounts  will  of  course  represent  their  actual  value,  and  may  be  entered  as  resources  in  the  statement  at 
the  end  of  the  year.  The  percentage  should  be  large  enough  to  allow  for  wear  and  tear  of  machinerv, 
and  such  shrinkage  in  value  of  other  accounts  as  experience  has  shown  will  result  from  the  nature  of  the 
business;  and  no  attempt  should  be  made  to  show  fictitious  gains,  through  making  a  smaller  allowance 
for  depreciation  than  the  nature  of  the  business  will  warrant. 

Transfer  the  footing  of  the  Sundries  column  of  your  petty  cash  book  to  the  credit  side 
of  the  main  cash  book,  writing  the  total  amount  in  the  Cash  Paid  column,  with  the  expla- 
nation. Petty  Cash,  per  P.  C.  B.,  and  place  a  check  mark  in  the  ledger  folio  column,  as 
these  items  wall  be  posted  to  the  debit  of  the  various  accounts  from  the  petty  cash  book, 
and  are  only  transferred  to  the  main  cash  book  in  order  that  the  balance  of  cash  may  be 
shown  on  that  book. 

Balance  your  cash  book.     Post  all  books,  and  take  a  trial  balance. 
Com. — 17 


258 


MODERN    ILLUSTRATIVE  •[BOOKKEEPING. 


DIRECTIONS   FOR    POSTING. 

.Tournal.  Carry  the  totals  of  Bills  Receivable  and  Accounts  Receivable  columns  inio 
the  General  columns  (see  model,  page  244).  Post  each  item  in  the  General  columns  to 
the  account  named  in  the  general  ledger,  and  post  each  item  in  the  Accounts  Receivable 
column  to  the  credit  of  the  proper  account  in  the  customer's  ledger,  as  in  August  and 
September.     Check  back,  to  see  that  your  posting  is  correct. 

Cash  Book.  On  the  debit  side,  post  the  footing  of  Accounts  Receivable  column  to 
the  credit  of  Accounts  Receivable  in  the  general  ledger,  and  the  items  in  this  column  to 

Statement  op  Losses  and 


First  cost  of  Mdse.  Sales,  as  under: 

Materials 

Labor 

Mdse.  Returned 

Discount  on  Sales 

Freight 
Balance  carried  down  * 


Manufacturing  expenses,  as  under: 
Foremen's  Salaries 
Royalties 
^liil  Supplies 

Fuel,  Light  &  Oil 

Depreciation,  IMachinery 

"  Furniture  &  Fixtures 

"  Lasts  &  Patterns 

Repairs 

Taxes 

Balance  carried  down  * 


Selling  Expenses,  as  inider: 
Salesmen's  Salaries 

"  Expenses 

Office  Help 
Office  Supplies 

u 

Balance  carried  down  '•■ 


General  Expenses,  as  under: 
Officers'  Salaries 
Interest  &  Discount 
Collection  &  Exchange 

Expense  t 

Net  Gain  * 


cost 
on  hand 

cost 
on  hand 


cost 
on  hand 


*Tobe  written  in  red  ink. 


215503 

17 

I325I7 

20 

4228 

75 

7964 

90 

3863 

90 

364077 
79731 

— 

443809 

4S96 

5472 

68 

4792.00 

1 

680.50 

4III 

50 

3407-30 

327.90 

3079 

40 

5875-00 

345-50 

2850.00 

9070 

1260 

50 

1 

742 

52. 

28632 
51098 

— 

79731 

10240 

!   6217 

25 

1   3268 

50 

214.00 

31-50 

182 

50 

19908 
31190 

51098 

7o<.)o 

215 

40 

405 

17 

1242 

30 

8862 
22327 

— 

31 190 

92 

53 


58 
95. 
53 


25 

70 


87 

S3 
70 


tThe  items  which  make  up  the  Expense  account  are  not  taken  from  any  particular  branch  of  the 
business,  and  .some  bookkeepers  would  divide  this  account  so  as  to  give  part  of  it  to  manufacturing 
expenses,  part  to  selling  expenses,  and  part  to  general  expenses,  but  in  this  series  of  tran.s.'iciions  it  has 
been  considered  advi-sable  to  carry  the  whole  account  to  general  expenses. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


259 


the  credit  of  the  persons  named  in  the  customers'  ledger.  Post  the  footing  of  Discount 
on  Sales  column  to  the  debit  of  Discount  on  Sales  in  the  general  ledger.  Carry  the  footing 
of  Merchandise  Sales  column  into  the  Net  Cash  Received  column,  and  post  the  amount  to 
the  credit  of  Merchandise  Sales  in  the  general  ledger  (see  form,  pages  246  and  247).  Post 
all  items  other  than  accounts  receivable  as  may  appear  in  the  Net  Cash  Received  column 
>to  the  accounts  named  in  the  general  ledger. 

On  the  credit  side,  post  the  footing  of  Vouchers  Payable  column  to  the  debit  of  Vouchers 
Payable  in  the  general  ledger.  Post  the  footing  of  Discount  on  Purchases  column  to  the 
credit  of  Discount  on  Purchases  in  the  general  ledger.     Carry  the  footnig  of  Collection 

Gains,  Dec.  31,   190-: 


Mdse.  Sales 

Manufactured  goods  on  hand 
Materials  "      " 

Disc,  on  Purchases 


Balance  brought  down 


Balance  brought  down 


Balance  brought  down 


398245 
22148 

1 694 1 
6473 


75 
70 
80 
20 


443809 


443809 


79731 


45 


53" 


79731    53 


51098    95 


51098 


31190 


31 190 


95. 
70' 


70 


and  Exchange  column  into  the  Cash  Paid  column,  and  post  the  amount  to  the  debit  of 
Collection  and  Exchange  in  the  general  ledger.  Post  all  items  not  found  in  these  special 
columns  to  their  respective  accounts  in  the  general  ledger  from  the  Cash  Paid  column  of 
the  cash  book,  and  be  sure  to  place  the  ledger  page  in  the  folio  column. 


260 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


Statement  of  Resources  and 


Cash  in  bank 

"     in  petty  cash  drawer 

Property  as  under: 

Materials  and  goods  in  process,  per  inventory 

Manufactured  goods,  "  " 

Office  SuppHes, 

Mill  Supplies, 

Fuel,  Light  &  Oil, 

Lasts  &  Patterns 

Furniture  &  Fixtures 

Real  Estate,  valued  at  cost 

IMachinery  &  Tools 

Book  accounts  as  under: 

Accts.  Receivable,  per  customers'  ledger 
Bills  Receivable,  per  bill  book 

Good  Will,  valued  at  cost 
Treasury  Stock,  valued  at  par 


I39I4 

50 

12 

i5_ 

13926 

22148 

70 

1 694 1 

80 

31 

50 

680 

50 

327 

90 

82 10 

40 

2565 

30 

50906 
60548 

50786 

27516 

40 

6400 

33916 
30000 

20000 

260083 

10 


50 


40 


65 


Petty  Cash  Book.  Post  the  footing  of  Accounts  Receivable  column  to  the  debit  of 
Accounts  Receivable,  the  footing  of  Expense  column  to  the  debit  of  Expense,  and  the 
items  in  Sundries  column  to  the  debit  of  the  accounts  named. 

Sales  Book.  Post  the  total  of  On  Account  column  to  the  debit  of  Accounts  Receiv- 
able and  to  the  credit  of  Merchandise  Sales  in  the  general  ledger.  Post  the  items  in  this 
column  to  the  debit  of  the  proper  accounts  in  the  customers'  ledger.  Do  not  post  Cash 
Sales  column,  as  these  sales  are  posted  from  the  cash  book.  See  that  the  footing  of  the 
Cash  Sales  column  in  the  sales  book  agrees  with  the  footing  of  the  Merchandise  Sales 
column  on  the  debit  sidfe  of  the  cash  book. 

A'oucher  Register.  Foot  the  Vouchers  Payable  Cr.  column,  and  post  this  footing  to 
the  credit  of  Vouchers  Payable  in  the  general  ledger.  Foot  each  coltnnn  under  ' '  Distribu- 
tion," and  post  these  footings  to  the  debit  of  the  accounts  named  in  the  general  ledger; 
also  post  the  items  in  the  Miscellaneous  Accounts  column  to  the  debit  of  the  accounts 
named  in  the  general  ledger.  See  that  the  sum  of  the  footings  of  the  distribution  columns 
and  the  Miscellaneous  accounts  column  equals  the  footing  of  Vouchers  Payable  Cr.  coltimn. 

Make  statements  of  losses  and  gains  and  resources  and  liabilities,  using  models  on 
pages  258,  259,  260,  261. 

Materials  and  goods  in  process,  valued  at  $9600.75. 

Manufactured  goods  on  hand,  valued  at  $17600.  , 

Real  estate,  valued  at  cost. 

Mill  sttpiDlies,  valued  at  $640.29. 

Fuel,  light  and  oil,  valued  at  $468.10. 

Office  supplies,  valued  at  $40.50. 


DIRECTIONS   FOR   CLOSING   THE    LEDGER. 

In  a  manufacturing  business,  it  is  customary  to  close  all  accounts  which  contribute  to 
the  cost  of  merchandise  into  Merchandise  Sales  account,  iIku  close  that  account  into  Loss 
and  Gain,  instead  of  clcjsing  each  account  into  Loss  and  Gain,  as  in  an  ordinary  business. 
Yoti  may,  therefore,  close  accounts  as  follows: 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


261 


lyiABiLiTiEs,  Dec.  31,  1 89-. 


Book  accounts  owed  as  under: 

Vouchers  Payable,  per  voucher  register 
Bills  Payable,  per  bill  book 

Capital  Stock 

Surplus 

Reserve  for  Bad  Debts 

Undivided  Profits 

Profits  per  statement  of  Losses  &  Gains 


12229 
15000 


37 


27229 

200000 

9450 
426 
648 

22327 


37 


75 
80 

90 
83 


260083   65 


Close  Discount  on  Purchases,  by  entering  an  amount  equal  to  the  balance  of  the  account 
on  the  debit  side,  in  red  ink,  with  the  explanation,  Jl/atcrials;  foot  and  ritle,  and  transfer 
the  amount  to  Materials  account,  with  the  explanation,  Discount  on  Purchases.  Enter  the 
inventory  of  materials  and  goods  in' process  on  the  credit  side  of  IMaterials  account,  in  red 
ink,  then  close,  by  writing,  in  red  ink,  on  the  smaller  side,  Merchandise  Sales,  and  transfer 
to  Merchandise  Sales  account,  with  the  explanation,  Materials.  Close  Discount  on  Sales, 
Merchandise  Returned,  Labor,  and  Freight  accounts  in  the  same  manner,  and  transfer  to 
the  Merchandise  Sales  account.  Close  this  accoimt,  writing  Balance,  in  red  ink,  on  the 
smaller  side;  foot,  rule,  and  bring  down  the  balance  on  the  opposite  side.  Close  Foremen's 
Salaries,  Royalties,  Mill  Supplies,  Fuel,  Light  and  Oil,  Depreciation,  Repairs,  and  Taxes 
accounts  into  Merchandise  Sales  account.  Transfer  to  that  account,  and  again  close, 
footing,  ruling,  and  bringing  down  the  balance  as  before.  Do  not  forget  to  add  the 
inventories  to  their  respective  accounts,  and  to  carry  the  amounts  below  the  rttling  on  the 
debit  side.  Close  Salesmen's  Salaries,  Salesmen's  Expenses,  Ofhce  Help,  and  Office  Sup- 
plies accounts  into  Merchandise  Sales  account.  Transfer  and  close  the  third  and  final 
section  of  the  Merchandise  Sales  account,  by  entering  on  the  credit  side,  in  red  ink,  the 
inventory  of  manufactured  goods  on  hand;  on  the  debit  side  of  the  account,  in  red  ink, 
write  the  balance,  with  the  explanation,  Gain,  and  transfer  the  amount  to  Loss  and  Gain 

account,  as  usual.  Close  Officers'  Salaries,  Interest  and  Discount,  Collection  and  Exchange, 
and  Expense  accounts  as  in  previous  sets,  and  transfer  to  Loss  and  Gain  account.  Close 
Loss  and  Gain  account,  by  writing,  in  red  ink,  on  the  debit  side,  Balance,  and  bring  down 
this  amount. 

Hand  in  yotir  books  for  inspection. 


Additional  Entries. 

No.  134. — Jan.  5.  At  a  meeting  of  the  stockholders,  held  Jan.  ist,  the  old  officers 
and  board  of  directors  were  re-elected.  It  was  voted  to  declare  a  dividend  of  ic?  on  the 
stock  issued,  amounting  to  $18000;  to  carry  5'r,  amounting  to  $gooo,  into  the  Surplus 
account;  to  lay  aside  $4000  as  a  reserve  for  bad  debts;  and  to  carry  the  balance  of  the 


262  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

profits  into  Undivided  Profits  account.  It  was  furthermore  voted  to  sell  the  treasury 
stock  on  hand  at  such  prices  as  could  be  realized  in  open  market,  and  to  appl}-  the  pro- 
ceeds to  the  extension  of  the  business.  In  accordance  with  the  first  vote  mentioned,  above, 
make  an  entry  in  j'our  journal,  debiting  Loss  and  Gain,  and  crediting  Dividend,  Siirplns, 
Reserve  for  Bad  Debts,  and  Undivided  Profits. 

No.  135. — Jan.  6.  Pay  each  stockholder's  dividend,  writing  checks  for  the  amounts 
due.     Enter  in  ^-our  cash  book,  debiting  Dividend  for  the  full  amount. 

No.  136. — Jan.  7.  The  treasury  stock  has  been  sold,  W.  J.  Harlan  purchasing  100 
shares  at  $135,  and  Mrs.  E.  M.  Hilton  purchasing  100  shares  at  $133.  Checks  for  these 
amounts  are  received. 

Enter  in  your  cash  book,  crediting  Treasury  Stock  for  the  par  value  of  the  200  shares, 
and  crediting  Premium  for  the  amount  received  in  excess  of  the  par  value.  Post  these 
cash  book  and  journal  entries.  Open  accounts  with  Dividend  and  Premium  in  the  general 
ledger.  If  your  work  is  correct.  Loss  and  Gain,  Dividend,  and  Treasury-  Stock  accounts 
in  yotir  general  ledger  should  balance.  Open  accounts  with  \\'.  J.  Harlan  and  Mrs.  E. 
M.  Hilton  in  3-our  stock  ledger,  issue  the  stock  certificates  called  for,  and  post  to  their 
credit. 

Take  a  proof  trial  balance  (see  model,  page  47),  and  hand  in  all  of  your  books  for 
examination. 

QUESTIONS. 

1.  Define  a  joint  stock  company,  and  show  its  advantages  over  a  partnership. 

2.  What  is  the  liability  of  a  stockholder  in  the  ordinar}'  joint  stock  compan}-.     What 
is  his  liability  in  a  limited  joint  stock  company? 

3.  What  is  a  corporation,  and  what  is  the  liabilit}-  of  its  stockholders? 

4.  Describe  the  organization  of  a  corjDoration. 

5.  Define  surplus,  dividend,  treasury  stock. 

6.  What  are  the  special  books  required  to  show  the  corporate   transactions  of  a 
business? 

7.  Describe  the  stock  ledger.     With  what  account  in  the  general  ledger  should  its 
balance  agree? 

8.  Describe  the  method  of  using  a  voucher  in  the  voucher  system  of  accounts. 

9.  By  the  use  of  the  voucher  register,  what  accounts  may  be  omitted  from  the  ledger? 

10.  How  would  you  find  from  your  voucher  register  the  balance  of  vouchers  payable? 

11.  Show  the  advantages  of  a  systematic  division  of  expenses,  as  shown  in  the  special 
columns  of  the  voucher  register. 

12.  When  vo'uchers  are  paid,  what  entry  should  be  made  in  the  cash  ])ook? 

13.  What  is  the  object  of  the  petty  cash  book?     Of  what  is  its  debit  comprised? 

14.  Describe  the  Reserve  for  Bad  Debts  account,  and  show  what  its  debits  and  crctlils 
will  comprise. 

15.  Explain  the  use  of  Depreciation  account,  and  show  its  advantages. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


263 


APPENDIX, 


SINGLE   ENTRY. 

In  single  entry  bookkeeping  the  ledger  contains  only  accounts  with  persons,  and  con- 
sequently only  such  entries  as  affect  personal  accounts  should  appear  in  a  single  entry 
journal;  and  since  there  is  no  equality  of  debits  and  credits  in  single  entry  bookkeeping, 
the  journal  entries  will,  in  most  cases,  contain  only  a  single  debit  or  credit. 

The  following  is  a  model  of  a  single  entry  journal,  showing  the  records  which  would 
be  made  by  single  entry  bookkeeping  for  the  transactions  shown  in  your  model  journal- 
daybook  on  pages  6  and  7. 

Model  Single  Entry  Journal-Daybook. 
January  i,   190-. 


A.  H.  Harper, 

Commenced  this  daj-  the  Flour  and  Grain  business,  investing 
$2,000  in  cash. 


J.  B.  Allen, 

Sold  him  on  account  50  brls.  Flour, 


A.  H.  Harper, 

Drew  cash  for  private  use. 


J.  Grant  &  Co., 

Bought  of  them  on  account  600  bu.  Oats, 


J.  B.  Allen, 

Received  of  him  cash  on  account. 

15 
J.  Grant  &  Co., 

Paid  invoice  Jan.  8th  in  cash. 

25 
J.  B.  Allen, 

Sold  him  on  account  50  brls.  Flour, 


Cr. 

3000 

ting 

Dr. 

225 

4-50 

Dr. 

50 

Cr. 

198 

•33 

Cr. 

100 

Dr. 

198 

Dr. 

237 

4-75 

50 


It  will  be  seen,  by  comparison,  that  all  records  of  transactions  which  do  not  affect 
personal  accounts  have  been  omitted  from  the  single  entry  journal-daybook;  but  a  cash 
book  should  be  kept,  which  may  be  the  same  in  form  as  a  double  entry  cash  book,  or  it 
may  be  kept  like  the  following  model,  which  records  the  cash  transactions  of  the  model 
journal-daybook  on  pages  6  and  7. 


264 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


1 90-. 


Model  Single  Entry  Cash  Book. 
Cash. 


Dr. 


Cr. 


Jan. 


Feb. 


4 
6 

13 
15 
31 
31 


Invested, 

Paid 

Bot.  of  A.  H.  Roe  &  Co., 

Sold  W.  D.  Leach, 

A.  H.  Harper, 

Received  of  J.  B.  Allen, 

Paid  J.  Grant  &  Co., 

Paid 

Balance  on  hand  * 


Balance 


by  A.  H.  Harper 
rent  for  January' 
200  brls.  Flour 
100     " 

drew  for  private  use 
on  acct. 
invoice  i  8 
salaries  to  date 


on  hand 


3-90 
4-50 


3000 
450 

100 

75 
780 

50 

60 

2387 

3550 

3550 

2387 

*  To  be  written  in  red  ink. 

A  record  of  notes  issued  and  of  notes  received  should  be  kept  in  a  bill  book  similar  to 
the  ordinary  double  entry  bill  book,  and  these  records,  with  an  inventory  taken  in  the 
usual  manner,  will  enable  the  bookkeeper  to  prepare  a  statement  at  any  time  showing  the 
resources  and  liabilities,  the  present  worth,  and  the  net  gain  of  the  business. 

Copy  on  a  sheet  of  journal  paper  the  journal  and  cash  book  models.  There  will  be 
space  on  one  side  of  the  journal  sheet  for  both  models.  Take  a  half  sheet  of  ledger  paper 
and  post  the  journal  entries  the  same  as  in  double  entry,  opening  the  personal  accounts 
required — A.  H.  Harper,  J.  B.  Allen,  and  J.  Grant  &  Co. 

The  cash  book  shows  the  amount  of  cash  on  hand,  $2387.  The  inventor}^  of  inisold 
merchandise,  if  taken  Jan.  31st,  would  show  the  following  goods  on  hand:  350  brls.  flour, 
valued  at  $4  per  brl.;  300  bu.  oats  at  33:'/'  per  bu.;  300  bu.  rye  at  57'.'  per  bu. 

The  bill  book,  if  kept,  would  show  a  note  for  $338,  in  favor  of  the  business,  signed  by 
A.  B.  Frye;  and  the  following  notes  outstanding — one  in  favor  of  Garland  &  Co.  for  ^5571, 
and  one  in  favor  of  B.  W.  Keene  for  $820. 

The  ledger  shows  that  J.  B.  Allen  owes  $362.50. 

From  the  foregoing  data  it  will  be  easy  to  prepare  a  statement  of  resources  and  liabil- 
ities according  to  the  following  model. 

Statement  of  Resources  and  L,iabilities,  Jan.  31,  190-. 


Cash 

Bills  Receivable 

Merchandise 

J.  B.  Allen 

Bills  Payable 

Present  Worth* 


on  hand,  per  C.  B. 

B.  B. 

value  "    inventory 

owes  on  account 

notes  outstanding,  per  B. 


B. 


Resources. 


$. 
$. 
$■ 


Liabilities. 


*To  be  written  in  red  ink. 


Having  foiuid  the  present  worth  of  A.  H.  Harper,  as  above,  a  comparison  of  his  jircscnt 
worth,  Jan.  31,  190-,  with  the  amount  of  his  investment  Jan.  1,  190-,  will  show  his  .tjain 
or  I0.SS,  the  same  as  in  double  entry  bookkeeping.  Find  A.  H.  Harper's  net  gain  according 
to  the  following  model. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


265 


Statement  of  A.  H.  Harper's  Gain. 


A.  H.  Harper's  present  worth  Jan.  31,  190- 
"  "     "    investment    "   i,  190- 

"  "     "    net  gain* 

3366 
3000 

50 

366 

50 

i 

Write  the  statement  of  resources  and  liabilities  and  the  net  gain  on  the  first  blank 
page  of  your  journal.  Carry  the  net  gain  to  the  credit  side  of  A.  H.  Harper's  account  in 
your  ledger,  the  same  as  in  double  entry,  and  hand  the  journal  with  your  ledger  to  your 
teacher  for  approval. 

It  is  thought  the  foregoing  illustrations  will  prove  sufl&cient  to  enable  the  student  to 
perform  the  work  required  in  the  following  series  of  transactions,  using  the  single  entry 
journal-daybook,  cash  book  and  bill  book  as  records  of  the  business. 

If  A.  H.  Harper  should  desire  to  change  his  books  from  single  entry  to  double  entry, 
he  should  open  an  account  in  his  ledger  with  Cash,  carrying  to  its  debit  side  the  amount 
on  hand,  $2j8j;  also  with  Bills  Receivable,  carrying  to  its  debit  side  $338;  with  INIerchan- 
dise,  carrying  to  its  debit  side  the  amount  of  the  inventor}^  $i6jo;  and  with  Bills  Payable, 
entering  on  its  credit  side  the  amount  of  the  outstanding  notes,  $i3gi. 

After  your  papers  are  approved,  make  the  above  entries  in  the  ledger,  and  take  a  trial 
balance,  which  should  give  you  the  following  result. 


A.  H.  Harper 

Cash 

Bills  Receivable 

Merchandise 

Bills  Pavable 

J.  B.  Alien 


2387 
338 

1670 

00 
00 
00 

3366 

362 

50 

1391 

4757 

50 

4757 

50 


00 


50 


You  may  assume  that  under  date  of  Jan.  ist,  the  present  year,  3'ou  have  commenced 
the  retail  furniture  business  wdth  the  following  investment. 

A  stock  of  furniture,  valued  at  $1968.75;  office  furniture,  fixtiu'es  and  books,  valued 
at  $300;  cash  in  the  City  National  Bank,  $1245.50. 

Enter  in  the  journal  and  in  the  cash  book.  Use  the  first  column  of  your  journal  for 
items,  and  the  second  column  for  the  debit  or  credit  amount. 

The  following  is  a  form  to  show  your  journal  entry. 


Jas.  B.  Houghton, 

Commenced  the  Furniture  business,  investing  as  follows: 

Cash  in  bank,  per  C.  B. 
Furniture,  valued  at 
Office  fumitvire  &  fixtures 


Cr. 


460 

1500 

250 


2210 


Jan.  I . — Bought  of  the  Grand  Rapids  Furniture  Co. ,  Grand  Rapids,  Mich. ,  on  account, 
30  days,  furniture  as  per  invoice,  $1468.20.     (Enter  in  the  journal.) 

Paid  freight  on  the  above  invoice,  $62.25.      (Enter  in  cash  book  only.) 


266  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

Jan.  2. — Sold  Wni.  M.  Rand,  on  account,  i  parlor  set,  $65;  6  dining  chairs  at  $2; 
I  extension  table,  $15.  (Enter  in  the  journal,  carrying  each  item  into  the  first  money 
column.) 

Jan.  3. — Sold  sundry  items  for  cash,  as  per  cash  drawer,  $104.50.  (Enter  in  cash 
book  only.) 

Jan.  4. — Sold  Thomas  W.  Parsons,  on  account,  12  dining  chairs  at  $1.50;  6  kitchen 
chairs  at  75^/;   i  kitchen  table,  $2.50. 

Sold  E.  M.  Wardner,  on  account,  i  oak  bedroom  set,  $55;  2  ash  bedroom  sets  at  $15; 
I  leather  couch,  $45. 

Jan.  5. — Bought  of  E.  M.  Farmer  &  Co.,  Detroit,  merchandise  as  per  invoice,  $550. 
Gave  them  in  payment  your  note  at  30  days  for  $250;  the  balance  on  account,  terms  4  mos. , 
less  5^?  10  days. 

Credit  Fanner  &  Co.  for  the  full  amount,  and  debit  them  for  the  note.  Enter  the 
note  in  the  bill  book,  the  same  as  in  double  entry. 

Paid  freight  on  the  above  invoice,  $27.50. 

Jan.  6. — Paid  one  month's  rent,  $60;  also  paid  insurance  premium,  $30,  Vt  of  insur- 
ance policy  for  $3000  on  3'our  stock  of  furniture. 

Sold  Thomas  Hunter,  for  cash,  24  cane  seated  chairs  at  75'/';  3  settees  at  $2.25.  (Enter 
in  cash  book  only.) 

Sold  Emma  B.  Sheridan,  on  account,  12  ash  bedroom  sets  at  $25;  12  cotton  mattresses 
at  $6;  4  dining  tables  at  $12;  24  dining  chairs  at  $1.50.  Received  cash,  $150,  to  apply 
on  account.  (Debit  in  the  journal  for  the  full  amount  and  credit  for  cash;  also  enter  cash 
in  the  cash  book.) 

Balance  your  cash  in  the  cash  book,  writing  the  balance,  in  red  ink,  in  the  smaller 
column.     Foot,  rule,  and  bring  down  the  balance  to  commence  the  next  week. 

In  actual  business  the  cash  should  be  balanced  daily,  but  in  this  series  of  transactions 
you  will  balance  the  cash  at  the  end  of  each  week.  Your  balance  at  the  end  of  this  week 
should  be  $1345. 

Jan.  8. — Sold  C.  H.  Stratton,  Elm  House,  6  hair  mattresses  at  $25;  2  oak  bedroom 
sets  at  $40;   I  parlor  set,  $125;  2  French  plate  mirrors  at  $15. 

Paid  Grand  Rapids  Furniture  Co.,  on  account,  $500.  (Enter  in  journal  and  in  cash 
book.) 

Sold  sundry  items  for  cash,  as  per  cash  drawer,  $46.50. 

Jan.  9. — Sold  Wm.  M.  Rand,  on  account,  2  oak  bedroom  sets  at  $45;  1  cherry  bed- 
room set,  $35;  2  hair  mattresses  at  $30;  i  cotton  mattress,  $6.  Received  cash  on  account, 
$100.     (See  third  transaction  under  Jan.  6.) 

Jan.  id. — Bought  of  E.  F.  Higgins  &  Co.,  Michigan  City,  Ind.,  furniture  as  per 
invoice,  $498.75. 

Paid  freight  on  above  invoice,  $24.93. 

Jan.  II. — Paid  cash  for  books  and  stationery,  $7.50,  and  for  a  horse  and  a  delivery 
wagon,  $275. 

Jan.  12. — Sold  Mrs.  Edward  Leary,  on  account,  6  ash  l)edroom  sets  at  $20;   i  exten- 
sion dining  table,  $12;  12  cane  dining  chairs  at  $1.     Received  cash  to  apply  on  account,  $44. 
Sold  sundry  items  for  cash,  as  per  cash  drawer,  $28.75. 


MODERN    ILLUSTRATIVE    BOOKKEEPING. 


267 


Jan.  13. — Received  of  T.  W.  Parsons  cash  in  full  of  account,  $25.  (Journal  and  cash 
book.) 

Sold  Edward  Strang,  on  account,  i  cotton  velour  covered  couch,  $18;  i  Morris  chair, 
$12.50;  4  librarj^  chairs  at  $6.50;   i  library  table,  $30. 

Paid  for  clerk  hire,  two  weeks'  salary,  $30. 

Balance  your  cash  book,  and  bring  down  the  amount,  as  on  Jan.  6th. 

Jan.  15. — Received  of  C.  H.  Stratton  his  note  at  60  days,  to  pay  invoice  of  the  8th 
inst.      (Enter  in  journal  and  bill  book.) 

Paid  the  balance  of  E.  M.  Farmer  &  Go's  invoice  of  the  5th  inst.,  $300,  less  s<  oi  the 
full  invoice  for  payment  in  10  daj^s.  Discount,  $27.50;  cash  paid,  $272.50.  Enter  the 
full  amount  in  the  journal;  only  the  net  amount  in  the  cash  book.     Use  the  following  form. 


15 
E.  M.  Farmer  &  Co., 

Paid  to  balance  their  invoice  of  Jan.  5th,  cash 
5',  discount  on  invoice  of  $550 


Dr. 


300 

272 

50 

27 

50 

Cash  sales  of  merchandise,  as  per  cash  drawer,  $48.50. 

Jan.  16. — Bought  of  the  Grand  Rapids  Furniture  Co.  merchandise  invoiced  at  $1262.75. 
Paid  freight  on  above  invoice,  $63.13. 

Sold  Thomas  W.  Parsons,  on  account,  i  oak  bedroom  set,  $75;  i  parlor  set,  raw  silk, 
$120;   I  library  loiinge,  $18. 

Jan.  17. — Paid  for  advertising,  $12. 
Paid  for  shoeing  horse,  $1.25. 

Sold  Richard  Vose,  on  account,  i  parlor  set,  $110;  i  library  table,  $20;  4  library  chairs 
at  $6;   I  screen,  $5.50. 

Jan.  17. — Cash  sales  of  merchandise,  as  per  cash  drawer,  $38.75. 

Jan.  18. — Bought  of  E.  M.  Farmer  &  Co.,  Detroit,  net  4  mos.,  5'?  10  days,  furniture 
invoiced  at  $490.50. 

Paid  freight  on  above  invoice,  $24.50. 

Jan.  19. — Bought  of  J.  D.  Lansing  &  Bros.,  on  account,  90  days,  5^?  10  days,  furni- 
ture invoiced  at  $633.25. 

Paid  freight  on  above  invoice'  $31.66. 

Sold  Morris  Chaney,  on  account,  i  plate  glass  beveled  mirror,  $22.50;  i  leather  library' 
chair,  $25;  4  jardiniere  stands  at  $1.25. 

Cash  sales  of  merchandise,  as  per  cash  drawer,  $47.75. 

Jan.  20. — Sold  H.  M.  Preston,  on  account,  i  parlor  set,  plush,  $75:  i  oak  bedroom 
set,  $45;   I  pillar  extension  table,  $12;  six  dining  chairs  at  $1.50. 

Bought  of  Phillips  Chair  Co.,  Phillipsburg,  Ind.,  net  4  mos.,  5'?  10  daj-s,  furniture  as 
per  invoice,  $244.75. 

Paid  freight  on  above  invoice,  $12.24. 

Paid  for  hay  and  oats,  $7.50;  clerk  hire,  $20;  postage  and  express  charges,  $2.50. 

Cash  sales  of  merchandise,  as  per  cash  drawer,  $69.87. 

Sold  Hunter  &  Allison,  on  account,  50  cane  seated  chairs  at  $1;  50  school  desks,  indi- 
vidual lock,  at  $3.75;   I  teacher's  desk,  $12.50. 

Balance  your  cash,  as  on  Jan.  6th  and  13th. 


268  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

Jan.  22. — Received  of  E.  M.  Wardner,  to  balance  account  of  Jan.  4th,  cash,  $30,  and 
his  note  at  30  daj-s,  with  interest,  $100.      (Enter  note  in  bill  book.) 

Received  of  Mrs.  E.  Leary,  $15,  to  apply  on  account. 

Cash  sales  of  merchandise,  as  per  cash  drawer,  $62. 

Received  of  Edward  Strang  $50,  to  apply  on  account. 

Sold  Emma  Sheridan  i  parlor  set,  silk  brocatel,  $75;  2  card  tables  at  $2.50,  2  mirrors 
at  $3. 

Jan.  23. — Hunter  &  Allison  returned  10  cane  seated  chairs  at  $1. 

Bought  of  E.  F.  Higgins  &  Co.  furniture  as  per  invoice,  $235.75. 

Paid  freight  on  above  invoice,  $11.75. 

Jan.  24. — Accepted  E.  F.  Higgins  &  Co's  draft  at  30  days  for  amount  of  invoice  of 
Jan.  loth,  $498.75.      (Journal  and  bill  book.) 

Sold  C.  H.  Stratton  &  Co.,  on  account,  5  oak  bedroom  sets  at  $35;  i  carved  sideboard, 
$80;  6  card  tables  at  $3. 

Jan.  25. — Had  C.  H.  Stratton' s  note  of  Jan.  15th  discounted  at  the  bank  and  received 
cash  for  the  proceeds.  Face  of  note,  $385;  discount,  50  days.  (Enter  the  net  proceeds 
in  cash  book  and  mark  the  note  paid  in  bill  book.) 

Sold  E.  M.  Wardner,  on  account,  i  hbrary  desk,  $60;  i  revolving  book  case,  $22.50; 
I  revolving  chair,  $8. 

Bought  of  the  Phillips  Chair  Co.  merchandise  as  per  invoice,  $192.85. 

Paid  freight  on  above  invoice,  $9.65. 

Jan.  26. — Paid  Lansing  &  Bros,  for  invoice  of  the  19th,  less  5V.  (Journal  and  cash 
book.) 

Cash  sales  of  merchandise,  as  per  cash  drawer,  $84.60. 

Jan.  27. — Received  of  Hunter  &  Allison,  to  balance  account  of  the  20th,  cash,  $40, 
and  their  note  at  4  mos.,  with  interest. 

Sold  Edward  Strang,  on  account,  6  dining  chairs  at  $2.50;  i  pillar  extension  table, 
$18;    I  writing  table,  $6.50.     Received  on  account,  $50. 

Balance  your  cash  book. 

Jan.  29. — Sold  Richard  Vose,  on  account,  i  Morris  chair,  leather,  $20;  i  rattan  rocker, 
$7.50.     Received  $50,  to  apply  on  account. 

Returned  to  the  Phillips  Chair  Co.  24  cane  seated  chairs  at  $1;  6  rockers  at  $2.  These 
goods  were  not  as  ordered. 

Cash  sales  of  merchandise,  as  per  cash  drawer,  $91.40. 

Jan.  30.— Paid  PhilHps  Chair  Co.  for  invoice  of  Jan.  20th,  less  5"^,  $232.51.  (Journal 
and  cash  liook.) 

Bought  of  Lansing  &  Bros.,  4  mos.,  5;.  10  days,  merchandise  as  per  invoice,  $498.70, 
freight  prepaid. 

Received  of  H.  M.  Preston,  on  account,  $75. 

Sold  Morris  Chaney,  on  account,  i  office  desk,  roll  top,  $40;   i  office  chair,  $6.50. 

Jan.  31. — Paid  clerk  hire  to  date,  $30. 
Cash  sales,  as  per  cash  drawer,  $62.87. 

Sold  Mrs.  E.  Leary  i  parlor  set,  $55;  i  beveled  mirror,  $6.50.  Received  cash  to  apply 
on  account,  $25. 


MODERN    ILLUSTRATIVE    BOOKKEEPING.  269 

After  entering  the  preceding  transactions  in  your  journal  and  cash  book,  balance  j'our 
cash  book,  and  hand  it  with  the  journal  to  your  teacher  for  inspection  before  posting. 
After  your  journal  and  cash  book  have  been  approved,  post  from  the  journal  to  your 
ledger.  Since  there  is  no  equality  of  debits  and  credits  in  the  journal,  of  course  no  trial 
balance  can  be  taken. 

Your  in\entory  shows  merchandise  on  hand,  valued  at  $5040.75;  horse  and  delivery 
wagon,  valued  at  $275;  office  furniture,  fixtures  and  books,  valued  at  $275;  11  months' 
unexpired  premium  on  insurance  policy,  valued  at  $27.50. 

Find  from  your  ledger  the  amounts  due  from  personal  accounts;  from  your  bill  book, 
the  value  of  notes  on  hand,  also  the  notes  outstanding.  From  your  ledger  find  the  balances 
due  from  you  to  other  firms,  and  using  the  model  on  page  264,  prepare  a  statement  of 
resources  and  liabilities.  Your  present  worth  should  be  $3799.32.  Compare  this  with 
your  investment,  and  find  your  gain  or  loss  for  the  month's  work. 


LEGAL  FORMS. 


PARTNERSHIP   AGREEMENT. 

Articles  of  agreement,  made  the  first  day  of  July,  190-,  between  Emerson  W. 
Benton  and  Chas.  M.  Pelton,  both  of  the  city  and  count}'  of  Worcester,  and  state  of 
Massachusetts,  witnesseth  as  follows: 

First.  The  parties  above  named  have  agreed  to  become  copartners  together,  and  by 
these  presents  do  agree  to  become  partners  under  the  firm  name  of  E.  \V.  Benton  &  Co., 
for  the  purpose  of  carrying  on  a  commission,  shipping  and  general  merchandising  business, 
in  the  said  citj-  of  Worcester  and  state  of  Massachusetts,  from  the  date  of  this  agreement 
until  such  time  as  the  partnership  may  be  legally  dissolved. 

Second.  The  said  Emerson  W.  Benton,  of  the  first  part,  shall  contribute  the  resources 
of  his  late  business  located  at  ^242  South  St.,  as  shown  by  bill  of  sale  executed  under  even 
date,  less  his  liabilities,  which  are  to  be  assumed  by  the  new  firm  and  paid  as  they  become 
due,  making  a  net  investment  of  Seven  Thousand  Four  Hundred  Dollars  ($7400).  The 
said  Chas.  M.  Pelton,  of  the  second  part,  shall  contribute  cash,  $4000,  and  a  shipment  of 
merchandise  now  in  the  hands  of  Geo.  M.  Howe  &  Co.,  of  Boston,  Mass.,  invoiced  at 
$2685.75,  making  a  total  investment  of  Six  Thousand  Six  Hundred  Eighty-five  Dollars 
and  Seventy-five  Cents  ($6685.75.) 

Thh'd.  During  the  continuance  of  this  agreement,  the  said  Emerson  W.  Benton  and 
the  said  Chas.  M.  Pelton  shall  each  give  his  entire  time  to  the  business  in  which  they,  by 
this  agreement,  become  partners. 

Fourth.  Each  partner  shall  receive  interest  upon  his  net  investment  at  the  rate  of  six 
per  cent.,  the  said  interest  to  be  deducted  from  the  profits  of  the  business. 

Fifth.  The  gains  and  losses  of  the  business  shall  be  divided  equally  between  the 
partners,  E.  W.  Benton  and  C.  ]\I.  Pelton. 

Sixth.  The  said  E.  W.  Benton  shall  attend  to  the  buying  and  selling  of  goods  and 
the  general  management  of  the  store,  while  the  said  C.  M.  Pelton  shall  ha\-e  full  charge 
of  the  books,  and  shall  sign  all  checks  and  other  negotiable  paper  of  the  firm. 

Ix  WITNESS  WHEREOF,  the  parties  hereto  have  hereunto  set  their  hands  and  seals  in 
duplicate  the  day  and  5'ear  first  above  written. 

Emerson  W.  Benton. 

Charles  M.  Pelton. 
Signed,  sealed  and  delivered  in 
the  presence  of 

G.  E.  French. 

DISSOLUTION    OF    PARTNERSHIP. 

m  case  of  a  dissolution  of  partnershijD,  it  is  cuslonuu  y  to  send  a  notice  of  such  dissolu- 
tion, with  the  conditions  attending  it,  to  each  person  with  whom  the  firm  has  had  dealings, 
and  also  to  publish  this  notice  in  the  newspapers  of  the  city  or  town  in  which  llie  fnni  lias 
conducted  its  business. 

In  case  of  special  agreement  between  the  partners  regarding  the  indebtedness  of  any 

person,  such  as  occurs  in  regard  to  the  shipment  to  T.  W.  Bowen  &  Co.  ;it  the  close  of 

June,  the  party  interested  should  receive  a  special  notice  of  such  agrceniL'nt  signed  ])y 

both  partners. 

270 


MODERN    ILLUSTRATIVE    BOOKKEEPING  271 

NOTICE   OF   DISSOLUTION    OF   PARTNERSHIP. 

You  are  hereb,y  notified  that  the  copartnership  heretofore  existing  between  H.  F.  Adams 

and  E.  C.  Mills  under  the  firm  name  of  H.  F.  Adams  &  Co.,  at  Albany,  N.  Y.,  is  this  day 

dissolved.     Accounts  due  the  firm  are  to  be  paid  to  H.  F.  Adams,  and  all  claims  against 

the  firm  should  be  presented  to  him  for  payment  when  due. 

Dated  Albany,  N.  Y.,  June  30,  190-. 

H.  F.  Adams. 

E.  C.  Mills. 
BILL  OF   SALE. 

Know  all  mKN  by  these  presents,  that  I,  E.  H.  Reed,  of  the  city  of  Worcester, 
county  of  Worcester,  and  state  of  Massachusetts,  of  the  first  part,  in  consideration  of  the 
sum  of  $6955  to  me  in  hand  paid  by  E.  H.  Reed  &  Co.,  of  the  county  and  state  aforesaid, 
parties  of  the  second  part,  the  receipt  of  which  is  hereby  acknowledged,  have  bargained 
and  sold,  and  by  these  presents  do  grant  and  convey  unto  the  said  parties  of  the  second 
part  all  of  the  resources  of  my  late  business  conducted  at  if3i2  South  St.,  as  follows:  real 
estate,  valued  at  $9500;  merchandise,  as  per  schedule,  valued  at  $916.55;  horses  and 
wagon,  valued  at  $325;  furniture  and  fixtures,  valued  at  $250;  also  the  following  balances 
of  accounts  due,  as  per  ledger:  Theodore  Crosby  &  Co.,  $129.33;  A-  W.  Noone  &  Co., 
$528.44;  Public  Market  Co.,  $244.60;  Geo.  H.  Tucker  &  Co.,  $204.13;  City  Hotel  Co., 
$250.45;  a  total  of  $12348.50;  on  condition  that  the  said  firm  of  E.  H.  Reed  &  Co.  shall 
assume  the  liabilities  of  the  late  business  of  E.  H.  Reed,  as  follows:  note  in  favor  of 
Fischer  Flour  Co.,  $845.27,  dated  June  i6th  at  30  days,  and  the  following  balances  of 
accounts,  as  per  ledger;  Russell  &  Birkett,  $426.45;  Curtice,  Olney  &  Co.,  $1326.40; 
I^utz  Bros.,  $714.50;  Gillette  &  Hennigan,  $541.20;  a  total  of  $3853.82. 

To  HAVE  AND  TO  HOLD  the  Same  unto  the  said  parties  of  the  second  part  and  their 
legal  representatives  forever. 

In  WITNESS  WHEREOF,  I  have  hereunto  set  my  hand  and  seal  this  i6th  day  of  July, 
in  the  year  oi  our  Lord  one  thousand  nine  hundred  and . 


E.  H.  Reed. 


ARTICLES  OF  COPARTNERSHIP. 


Articles  of  copartnership,  made  this  first  day  of  August,  190-,  between  Mason 
E.  Decker  and  Thomas  J.  Sullivan,  of  the  firm  of  Decker  &  Sullivan,  of  the  first  part, 
and  Wm.  B.  Jennings,  of  the  second  part,  all  of  the  city  of  Rochester,  county  of  Monroe, 
and  state  of  New  York,  witnesseth  as  follows: 

The  parties  hereunto,  having  mutual  confidence  in  each  other,  do  this  day  form  with 
each  other  a  copartnership,  under  the  firm  name  of  Decker,  Sullivan  &  Co.,  for  the  purpose 
of  conducting  a  wholesale  dry  goods  business  at,::242  E.  Main  St.,  Rochester,  N.  Y.,  under 
the  following  terms  and  conditions,  to  commence  at  the  date  above  mentioned  and  to 
continue  for  five  years,  or  until  dissolved  by  mutual  agreement. 

First.  The  said  parties  of  the  first  part  shall  contribute  the  resources  of  their  late 
business,  located  at  #242  E.  Main  St.,  as  per  bill  of  sale  executed  under  even  date  here- 
with, less  the  liabilities,  which  are  to  be  paid  by  the  new  firm,  making  a  net  investment 
of  Forty  Thousand  Six  Hundred  Sixty-one  Dollars  and  Ninet3'-four  Cents  ($40661.94), 


272  ,  MODERN    ILLUSTRATIVE    BOOKKEEPING. 

each  partner's  share  of  said  investment,  being  shown  by  his  account  in  the  ledger  of 
Decker  &  SulHvan.  The  said  part}-  of  the  second  part  shall  invest  Twenty-five  Hundred 
Dollars  ($2500)  cash. 

Secojid.  At  all  times  during  the  continuance  of  their  copartnership  each  partner  shall 
give  his  full  time,  and  use  his  best  endeavors,  and  to  the  utmost  of  his  power  exert  him- 
self for  the  joint  interest,  profit,  benefit,  and  advantage  of  the  copartnership. 

Third.  Mason  L.  Decker  shall  receive  a  salary  of  One  Hundred  Fifty  Dollars  (S150) 
per  month,  Thomas  J.  Sullivan  shall  receive  a  salary  of  One  Hundred  Twent}--five  Dollars 
($125)  per  month,  and  Wm.  B.  Jennings  shall  receive  a  salary  of  One  Hundred  Seventy- 
five  Dollars  ($175)  per  month.  These  salaries  may  be  drawn  from  the  funds  of  the  busi- 
ness on  the  first  day  of  each  month. 

Fourth.  At  the  close  of  each  year,  or  at  such  date  as  the  books  may  be  closed,  each, 
partner  shall  be  charged  with  interest  at  six  per  cent,  on  such  sums  as  he  may  have  with- 
drawn from  the  business  for  his  personal  use  from  the  date  such  sums  were  drawn  unti. 
the  date  of  the  closing  of  the  books,  and  each  partner  shall  receive  six  per  cent,  interest 
on  his  investment  for  the  same  period  of  time. 

It  is  agreed  between  the  parties  aforesaid  that  no  member  of  the  firm  shall  draw  to 
exceed  Two  Hundred  Fifty  Dollars  ($250)  per  month  for  his  personal  use. 

In  witness  whereof,  the  parties  hereto  have  hereunto  set  their  hands  and  seals  in 
duplicate  the  day  and  year  first  above  written. 

Mason  L.  Decker. 
Thomas  J.  Sullivan. 

Wm.  B.  Jennings. 
Signed,  sealed  and  delivered  in  | 
the  presence  of  ) 

Chas.  J.  Foster. 


INDEX. 


Abstract  sales  book,  200. 

"         "       sheet,  200, 
Acceptance,  105. 
Account  sales,  150,  152- 

1.  i»     register,  140. 

Accounts,  classes  of,  35. 

"  of  business,  35. 

of  finance,  36. 
paj'able,  171. 

"  receivable,  171. 

Acknowledgment  of  remittance,  81. 
Analyses  of  statements,  92,  95. 
Appendix,  263. 
Articles  of  copartnership,  114,  270,  271. 

Balance  ledger,  179. 

Bank  account,  method  of  opening,  54. 

"      discount,  76. 
draft,  107. 
signature  card,  54. 
Bill  book.  III,  112,  169. 
Bill  of  sale,  271. 
Bills  payable,  30. 

"     receivable,  28. 
Blotter,  sales  from,  147. 
Bookkeeping,  definition,  5. 
Books  of  a  corporation,  230. 


(( 
(< 


Card  ledger,  206, 

Carpet  business,  wholesale,  130. 

Cash,  10,  II- 

Cash  account,  19,  41. 

Cash  book,  68,  136,  137,  166,  168,  201,  204,  245,  246. 

Cash  book,  single  entry,  204,  264. 

Cash  check,  121. 

Cash  sales,  150,  200. 

Certificates  of  stock,  229. 

Changing  from  single  to  double  entry,  217,  265. 

Check  book  stub,  55,  58,  60. 

Checking  from  journal  to  ledger,  26. 

Checks,  55,  58,  108,  121,  151. 

Circular  letter,  145. 

Closing  accounts,  42,  1S6. 

Closing  of  ledger,  260. 

C.  O.  D.  sales,  88. 

Commission  sales  book,  139. 

Commission,  Shipping  and  General  Merchandising 
busmess,  134. 

Consignment  ledger,  134,  1 35- 

Consignments  account,  162. 

Com.  — 18 


Corporations,  227. 
Credit  memorandum,  178. 
Customers'  statements,  202. 

Deposit  ticket,  55,  62. 
Depreciation  account,  257. 
Discount,  bank,  76-78. 

"         memorandum,  77. 
"         merchandise,  80, 
Dividend  book,  233. 

"         check,  233. 
Dividends,  229. 
Double  entry,  1-196,  227-262. 
Drafts,  103-107. 
"      bank,  107. 
"      sight,  103,  106. 
"      time,  105,  107. 
Dry  Goods  business,  166. 

Errors  in  trial  balances,  34. 
Examination,  130. 
Exercises  in  discount,  98. 

"         in  drafts,  109. 
Expense  account,  43. 

Figures  in  the  cents  column,  5c. 
Flour,  Grain  and  Produce  business,  49. 
Furniture  business,  265. 

Gain,  net,  how  found,  36,  265. 
Grocery  business,  wholesale,  114. 

Increase  or  diminution  of  capital  stock,  220. 

Indexing,  143. 

Indorsements,  32,  62,  75,  109,  173. 

Instructions  for  changing  from  single  to  double 

entry,  217. 
Instructions  to  student,  4,  49,  94,  io3- 
Interest  and  discount,  76. 
Introductory,  3. 
Inventories,  35,  63,  91,  132,  163,  170,  182,  191.  216 

225. 
Invoice,  51. 
Invoice  book,  iii,  113,  169. 

Joint  stock  companies,  227. 

Jovurnal,  197,  198. 

Journal-daybook,  5,  6,  143,  166,  167,  I97.  19S:  2^4 

263. 
Journal-daybook,  single  entry,  197,  263. 

Journalizing,  10. 


273 


INDEX, 


Ledger,  5,  8,  40. 
"       card,  207. 
Ledgerette,  204. 
IvCgal  forms,  270. 
Letter  impression  book,  141,  142. 
Letter  of  remittance,  86. 
Liability  of  stockholders,  227,  229. 
Loss  and  Gain  account,  43,  44,  165. 
Losses  and  gains  of  a  corporation,  229. 
Loss,  net,  how  found,  36. 

Main  ledger,  134,  169. 
Memorandum  of  credit,  178. 
Merchandise  account,  26,  42. 

"  discount,  80. 

Minute  book,  230. 
Modol  ledger  closed,  40. 
Monthly  statements,  64,  65. 

Notes,  28,  30,  75. 

"      discounted,  77,  98. 
Notice  of  dissolution,  271. 
Notification  of  draft,  116. 

Opening  of  ledger  accounts,  13,  25,  63,  82,  154. 
Opening  the  books  of  a  corporation,  234. 
Organization  of  a  corporation,  228. 
Overpayments,  256. 

Partnership,  114. 

"  agreement,  114,  270,  271. 

"  dissolution,  notice  of,  271. 

"  dissolution  of,  270. 

Partners'  interest,  164,  183-186. 
Pass  book  entry,  118. 
Per.sonal  accounts,  23. 
Petty  cash  book,  250. 
Po.sting,  directions  for,  13,  25,  63,  82,  154,  155,  156, 

180,  215,  225,  258. 
Power  of  attorney,  49. 
Price  lists,  66,  100,  132,  194. 
Proof  of  trial  balance,  47. 
Proprietor's  account,  45. 

"  statement,  216. 

Purchase  book,  201. 
"         ledger,  169. 

Questions,  20,  39,  46,  66,  102,  133,  165,  196,  226. 

Real  estate,  78. 

Receipts,  153. 

Remittance  letter,  86. 

Reports,   53,  57,  63,  79,  82,  89,  90,   118,   122,    124, 

127. 
Reserve  for  Had  Debts  account,  255. 


Rules  for  journalizing,  special: 
Bills  Payable,  30,  31. 

"     Receivable,  29,  31. 
Cash,  10,  II. 
Discount,  78,  125. 
Drafts,  104,  107. 
Expense,  11. 
Interest,  119,  126. 
Merchandise,  12,  28. 

"  discount,  80. 

Personal  accounts,  23,  24,  25. 
Proprietor,  11,  28. 
Real  estate,  78. 
Shipments,  121,  123. 
Rules,  general,  10,  23. 

Sales  book,  69,  70,  139,  140,  169,  245. 

"     ledger,  169. 

"     sheets,  197,  199. 
Selling  price  list,  December,  248. 
Shipment  ledger,  138,  140,  150. 
Shipments,  120,  121. 
Shipments  account,  162. 
Shipping  receipt,  85. 
Shoe  Manufacturing  business,  242. 
Single  entry,  5,  197,  263. 

"      cash  book,  204,  264. 
"      journal,  19S,  263. 
Statements  of  customers'  accounts,  64,  65. 
Statements  of  interest  accounts,  183,  185,  186. 
Statements  of  losses  and  gains,  35,  92,  126,  160,  184, 

258,  264. 
Statements  of  resoiu-ces  and  liabilities,  37,  98,  128. 

162,  192,  216,  260,  264. 
Stock  certificate  book,  231,  233. 
Stock  ledger,  231. 
Subscription  and  instalment  l)ook,  230. 

Tea,  Coffee,  and  Spice  business,  68. 

Telegram,  86,  87. 

Test  ledgers,  48. 

To  the  student,  4. 

Transfer  Ijooks,  231. 

Treasury  stock,  229. 

Trial  balances,  18,  33,  84,  265. 

Trusts,  228. 

"Voucher,  238,  249. 
"        check,  239. 
"        register,  241,  246. 
"        system  of  accounts,  237. 

Watered  stock,  230. 

Work  for  the  .student,  5,  10,  22,  27,  50,  71,  109,  n^ 
144,  170,  187,  208,  218,  242,  264. 


UNIVERSITY 


OF  CALIFORNIA 
BERKELEY 


LIBRARY 


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